Smaller de­vel­op­ers set sights on over­seas buys

China Daily (Hong Kong) - - BUSINESSCOMPANIES - By HU YUANYUAN huyuanyuan@chi­nadaily.com.cn

A $100 mil­lion fund raised by small and mid-sized Chi­nese de­vel­op­ers will in­vest in the United States prop­erty mar­ket, a move by do­mes­tic real es­tate com­pa­nies to di­ver­sify.

“One or two deals are ex­pected to close soon, and we may raise more money af­ter the Spring Fes­ti­val,” said Gong Yi, di­rec­tor of the China Real Es­tate Cham­ber of Com­merce.

The fund was ini­ti­ated by the US-China Real Es­tate In­vest­ment Center, which is af­fil­i­ated with the cham­ber.

“In­vest­ment re­turns are not the com­pa­nies’ ma­jor con­cerns,” said Gong. “They just want to di­ver­sify their busi­ness port­fo­lios, given in­creas­ing un­cer­tain­ties in the home mar­ket.”

Chi­nese prop­erty de­vel­op­ers’ over­seas ex­pan­sion has picked up steam this year.

Guangzhou R& F Prop­er­ties Co Ltd will pay 4.5 bil­lion ring­git ($1.4 bil­lion) for six sites in Malaysia, its first over­seas ac­qui­si­tion, the Hong Konglisted prop­erty de­vel­oper said in a state­ment to the Hong Kong stock ex­change on Mon­day.

The com­pany said it is con­tin­u­ously look­ing for over­seas op­por­tu­ni­ties, and the large Chi­nese com­mu­nity in Malaysia and fa­vor­able poli­cies for for­eign in­vestors made that na­tion a good choice, the no­tice said.

Shang­hai-based Green­land Hold­ing Group Co plans to in­vest $10 bil­lion over­seas next year, it said in an e-mailed state­ment on Mon­day. That means a dou­bling of its to­tal over­seas in­vest­ment.

Green­land has just launched two projects in Syd­ney, with a to­tal in­vest­ment of 6 bil­lion yuan ($978 mil­lion), the largest in­vest­ment in Aus­tralia by a Chi­nese de­vel­oper.

“Chi­nese en­ter­prises’ over­seas ex­pan­sion will ac­cel­er­ate, along with the coun­try’s ro­bust econ­omy and Chi­nese en­ter­prises’ global am­bi­tions,” Green­land Chair­man Zhang Yu­liang said.

Ac­cord­ing to Frank Chen, ex­ec­u­tive di­rec­tor of real es­tate con­sul­tancy CBRE Re­search China, Chi­nese de­vel­op­ers are fol­low­ing their clients over­seas.

Those clients are buy­ing real es­tate abroad as they em­i­grate, in­vest or ac­quire hous­ing for chil­dren study­ing over­seas.

“As the real es­tate sec­tor is highly reg­u­lated in China, they also want to di­ver­sify their risks. And they are also en­cour­aged by the suc­cess of their fore­run­ners,” said Chen.

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