Greenland Group Adds $360M Canada Project to List of Overseas Deals

Greenland Atlantic Yards

An artist’s rendering of Greenland’s Metropolis project in Los Angeles, which the group bought last year. 

China’s most aggressive international investor, Greenland Group, has announced a 67,000 square metre Toronto project as its latest overseas real estate acquisition.

The C$400 million (US$360 million) residential development makes Canada the seventh country in which the Shanghai-based developer has investments, after announcing deals in Australia, Malaysia, South Korea, Spain, Thailand, the UK, and the US. The majority of these deals have been signed within the last 12 months.

According to a report in the Wall Street Journal, for this latest project the state-run real estate giant intends to build a pair of residential towers on a 3,855 square metre site in downtown Toronto, with construction slated to begin with six months.

Looking for Profits Overseas

Greenland’s series of overseas acquisitions come as the developer sets targets for revenues from outside of China that are more than six times higher than what the group achieved in 2013.

Explaining the revised forecast, the group’s chairman, Zhang Yuliang said, “We will kick off the sales campaign in our projects in the United Kingdom, United States, Canada, Thailand and Malaysia this year, thereby boosting our overseas sales target to 20 billion yuan in 2014.”

Greenland’s 2013 overseas sales revenues amounted to RMB 3 billion. In a statement during January, the group indicated that it plans to spend between US$5 billion to $8 billion to buy up international assets during 2014.

Choosing Canada Despite Immigration Slowdown

The decision by Greenland to take on a Canadian project also indicates the ongoing potential appeal of real estate in the North American country, which only recently cancelled its investor visa program.

Compared to the US, Canadian property can be more easily acquired by Chinese residents, as a potential buyer need not have a Canadian bank account or any physical presence in Canada to make a purchase, according to representatives of Chinese online real estate portal Soufun.com.

Canada cancelled its investor visa program earlier this year after the system was widely criticized for allowing mainland Chinese to buy Canadian residency without needing to live in the country or pay domestic taxes.

Real Estate Developers Continue to Lead China’s Outbound Investment

Greenland’s Canada deal is only the most recent installment in an ongoing series of overseas acquisitions by Chinese real estate firms in which the company has become the star player.

While competitors such as China Vanke, Fosun, Xinyuan and Country Garden have all made overseas deals, Greenland has made the largest number, and in a wide variety of locations.

Also, unlike Vanke which has been careful to select local partners for its projects, and Fosun, which has shown a preference for purchasing established assets, Greenland is taking the high-risk, high-reward route of taking a majority stake in projects and developing the whole project from the earliest stages.

If successful, then Greenland’s strategy may allow a company which has been one of a crowd of players in the China real estate scene to become one of the country’s most successful international brands. However, real estate development projects typically take years to complete, and there is plenty of opportunity for markets to go up or down during that time frame.