Chinese developer targets London for investments
CHINESE developer Greenland Holding Group, the builder of one of China's tallest towers, plans to invest in London property after expanding in the US.
The state-owned developer will seek projects including hotels, apartments and retail in the city, chairman Zhang Yuliang said.
Greenland is "looking at" three London developments, he said, declining to elaborate because a decision has not been made.
Greenland, which said this month it will buy a 70pc stake in New York's Atlantic Yards, joins other Chinese developers that are entering real estate markets abroad as they see opportunities to diversify outside the home market. Dalian Wanda Group announced in June a luxury hotel and apartment building on the South Banks of the Thames.
"We are very interested in London," Mr Zhang said, adding that the city's mayor Boris Johnson visited the Shanghai-based company this month. "Greenland has investments in almost all the Chinese cities, so going globally is a must for all big companies like us."
Greenland is entering the London property market as home prices surge. Values in the UK capital this month rose 10.2pc from the previous month, an unsustainable rate as demand from overseas investors added pressure to a market where supply is tight, according to Rightmove.
Wanda, the Chinese developer controlled by the country's richest man Wang Jianlin, said in June it will spend £700m (€725m) on a 62-storey luxury hotel and apartment building on the south banks of the Thames. Wanda will erect the tallest residential building in Western Europe, at 205 metres, on the site upstream from the Houses of Parliament, Stephen Vernon, executive chairman of Green Properties, the seller of the site, said at the time.
ABP (China) Holdings Group, a closely held Beijing-based Chinese developer, in May signed an agreement with London officials to transform the 35-acre site at Royal Albert Dock into the capital's third business district after the City of London and Canary Wharf.
Greenland, set up in 1992 and owned by the Assets Supervision and Administration Commission of Shanghai Municipal Government, is also looking to add investments in New York and Los Angeles, Mr Zhang said.
The company reached an agreement with Forest City Ratner to co-develop the Atlantic Yards project in New York, including infrastructure and apartment units, the companies said in a joint statement on October 11. The transaction was the biggest deal of its kind by a Chinese developer in the US, according to Greenland.
In July, Greenland said it's investing $1bn in a downtown Los Angeles project that will have hotels, offices, apartments and luxury homes.
"The US government welcomes our investment there, while the Chinese government is also supporting Chinese companies to go abroad," Mr Zhang said.
Greenland will record property sales of more than 160 billion yuan (€19bn) this year, higher than its target of 150 billion yuan.
"We are still optimistic on China's property market at least for the next five to 10 years," Mr Zhang said. "It's basically impossible for the government to have another round of nationwide property curbs. Only a few Chinese cities need curbs.
"In the long run, we think China's property market is still good."
The Chinese government in March stepped up a three-year campaign to cool the housing market by ordering the central bank to raise down-payment requirements for second mortgages in cities with excessive cost gains.
That has done little to quench demand for homes. Home prices in China's four major cities jumped the most in September since January 2011, heightening concerns a bubble is forming as the government refrains from introducing more property curbs that would hinder economic growth. Home sales jumped 34pc in September from the previous month.
Greenland said in 2010 that it will invest 30bn yuan to build a 606-metre skyscraper in the central Chinese city of Wuhan.
The 660-metre Ping An Finance Centre in the southern city of Shenzhen will be China's tallest building when it is completed in 2016, according to the skyscraper centre database of the Council on Tall Buildings and Urban Habitat. China's tallest building currently is the 492-metre Shanghai World Financial Centre.
The trend for Chinese companies going abroad has just started," Zhang said in the group interview. "Every Chinese company goes out for its own reason, but the common ground is seeking globalisation." (Bloomberg)