As all successful developers know, only a prized and special location can breathe life and meaningful value into the structures that arise on it. Now, more Chinese developers are showing a strong will to stick to this idea with diversified buyers in the US.
In the latest case, Beijing-based Oceanwide Real Estate Group sees California as its ideal destination to expand overseas business as a new year is around the corner.
With a media avalanche, its Tohigh Construction unit recently signed an agreement to acquire Fig Central in Los Angeles for up to $200 million.
"Chinese and other Asian developers or investors are only looking for the best development sites in the downtown, with entitlements in-place, for the development of luxury condominiums, and to a lesser extent, hotel and retail," John Eichler, executive director of Cushman & Wakefield told China Daily on Monday.
He is one of two brokers on the deal. The seller is Moinian Group — one of the most active and prestigious high-rise developers in New York City.
Fig Central is a 4.6-acre plot within the downtown Los Angeles Sports and Entertainment District, a high-end, mixed-use complex, he said.
"At this time, Chinese developers or investors are not considering Grade B development sites in the downtown or other communities in Los Angeles," Eichler said.
Its development potential is the entitlements to build about 1.5 million square feet of high-rise mixed-use structures, including condominiums, hotels and retail space, he added.
The Chinese company said the project is a very important step for them to go abroad and push forward the internationalization of the company.
Experts said the purchase reflects a growing interest by Chinese investors in US real estate, particularly on the West Coast and in New York City.
"I know a lot of similar cases are undergoing it on the West Coast, and California has been the most popular destination for Chinese real estate developers and investors," said Skip Whitney, executive vice-president of Kidder Mathews, a San Francisco-based commercial real estate firm.
During the first ten months of this year, investment in the US property market from China touched a ceiling of $ 5.89 billion, six times of the combined value of their investment in 2011 and 2012, according to the latest data available from research institute Rhodium Group.
Whitney noted San Francisco and Los Angeles are the top destinations in California for Chinese developers, as they prefer to do business in a more familiar culture and there are more Chinese-heritage communities and immigrants in the two cities.
"I think Oceanwide has done its homework for its investment, just like Vanke's overseas move to San Francisco earlier this year," he said.
China Vanke, China's No1 real estate firm by market value, signed a deal with US real estate firm Tishman Speyer to develop a planned luxury residential condominium tower in San Francisco early this year. It was the developer's first venture into the US market.
Source: ChinaDaily
