The Many Ways Chinese Capital Is Entering US Property Markets
Wall Street Journal reports: Unlike Japanese investors, who entered the US property market en masse during the 1980s through high-profile acquisitions such as Rockefeller Center, Chinese invests are making forays into US commercial real estate though alternative, less-observable routes. According to Real Capital Analytics data, which the Wall Street Journal recently used in support of an article on Chinese investment into US property, just $62.6 billion of Chinese investment has occurred in US commercial real estate during 2010. In comparison, Canada accounted for $1.8 billion over the same period.
However, as the Journal points out, Chinese capital is finding alternative ways to enter the US property markets. For example, China’s largest sovereign wealth fund, China Investment Corp, is currently looking to invest in real estate-oriented equity funds. Ben Thypin, senior market analyst with Real Capital, observed that these types of private investments into US property will be hard to track, and thus not appear in many data sets.
Other brick-and-mortar buyers are those Chinese firms with operations in both the US and China. These buyers are considered domestic buyers, as they are actually US-based companies, only with access to capital from other ventures in China. California-based Standard Properties is an example of this type of scenario, where a firm with capital from its profitable operations in China is investing in US apartment properties.
Wealthy investors, sovereign wealth funds, and companies with access to equity and debt markets in both the US and China are among those seeking to bring in large amounts of investment capital available from China. The current US property market is offering competitive pricing and potential bargains with a large number of troubled assets winding their way through resolution channels. Companies such as Standard Properties are looking to place a significant portion of the reservoir of Chinese capital into US property.
To read more of this topical and fascinating article on Chinese investment into US commercial real estate, please visit the Wall Street Journal’s site.
View the full article on Wall Street Journal: The Many Ways Chinese Capital Is Entering US Property Markets
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Posted by: Nina Turner