Smaller developers set sights on overseas buys
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.