Chinese developers attracted to US commercial market

Chinese investors are increasingly attracted to the U.S. market.

The emergence of China as an economic world power is fully apparent in the commercial real estate industry around the world, but especially in the U.S. Investors who have never done business internationally are ramping up foreign investments for various projects, from shopping centers, mixed-use apartment buildings and office towers.

"We like the stable and mature investment market in the U.S. relative to the Chinese market," Jianrong Qian, chairman of Shanghai-based Chiway Holding Group Co., said in an interview with Bloomberg. "We were encouraged by the pace of the recovery here in the U.S. after the financial crisis. It shows the resilience of this market."

There are various reasons for Chinese investors' diversification into the global market, including strict regulations in their home country to worries that markets there are heading toward a bubble.

The six biggest metropolitan markets in the United States have especially attracted Chinese investors, who have poured $2.88 billion into commercial real estate there – up from $321 million in 2012, Bloomberg reported. 

"Chinese companies are getting bigger, so they want to diversify beyond their home base," said Goodwin Gaw, co-founder and chairman of Hong Kong-based Gaw Capital Partners, to the source. His company is raising as much as $500 million for its first fund in the United States, which will be used for real estate development and management. "They feel like it's their time."

Tag team approach
Some Chinese companies realize that investing in a foreign country is much easier with a domestic partner. For example, China Vanke Co., China's biggest publicly traded developer, has enlisted New York's Tishman Speyer Properties for the development of a $620 million, 655-unit high-rise in the Bay Area's South of Market district. The former has the majority equity position, and the latter is acting as the developer and project manager.

Greenland Holding Group is another developer that is experiencing success in the U.S. market. In October, it said it would buy a 70 percent stake in New York's Atlantic Yards project, which includes infrastructure and apartments, Bloomberg reported. The company said it was the biggest deal of its kind by a Chinese developer in the U.S.

The company is hard at work on the West Coast, too, where it's investing $1 billion in a downtown Los Angeles development that will include hotels, offices, apartments and luxury homes.

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