China – The Big Landlord in Overseas Real Estate Markets
It looks like Chinese investors, and perhaps even the national investment fund the Chinese government is in the process of setting up, are jumping at the bit to get into the once hot American and still-deceivingly-hot European real estate markets. The article below is translated out of this week’s Modern Weekly:
China Hopes to Become “The Big Landlord”
The past several years European and American investors have been pouring tons of money into China’s real estate market, but now the time has arrived for Chinese real estate investors to expand outward. Although there are many obstacles to overcome when investing in the overseas real estate market, many foreign real estate developers believe that Chinese investors are becoming more and more interested in overseas real estate.
In reality, some Chinese investors have already received the approval of the Chinese government to start investing in European real estate developments. “Paul’s Pearl” is one such development. This 180 hectare living community real estate development is located in the outskirts of St. Petersburg. The developer is a conglomerate jointly created by several Shanghai real estate companies.
Chinese real estate investors are also looking to America for investing opportunities. Beijing Vantone Real Estate Company is planning a building called “China Center” in New York, hoping to attract Chinese businesses as tenants, including those who have already gone public through the New York Stock Exchange or Nasdaq Stock Exchange or plan to do so.
But this is only a start. Foreign real estate industry analysts believe that in the next several years Chinese investors will become a hard to ignore presence. Once China sets up a national investment fund with its giant $1.2 trillion in foreign currency reserves, the restriction against investing in overseas real estate might be lifted. This will encourage even more Chinese investors to leap into the more mature, relatively stable American and European real estate markets.
China – The Greater Fool?
There has to be some greatest fool — and it sounds like some Chinese investors (along with investors world-wide) are already fitting this bill by jumping in at the end of the housing bubble — both in Europe and in America.