US Real Estate Projects With Chinese Characteristics

Chinese investors move into Vegas and SFFor investors tracking the trajectory of China’s outbound investment, one of the trends made apparent by recent events is the potential for wooing Chinese investors by building and marketing projects specifically to match Chinese buying habits. Projects such as Vanke’s planned $620 million residential project in San Francisco and a new Malaysian casino planned for Las Vegas are clearly planned to allow Chinese consumers to spend their money on brands and products that they are familiar with from their home market.

Vanke Making US Housing for Chinese Customers

In one of the highest profile examples of outbound investment by a Chinese real estate developer, Vanke Group, China’s largest real estate developer, announced on February 18th, that it would be making its first investment in the North American market. The project to develop a site on San Francisco’s Folsom Street will, when completed, market luxury condominiums to buyers, many of whom will likely come from Vanke’s customer base in China.

According to inside sources cited by Reuters, Vanke will hold a 70 percent stake in the joint venture project with US developer Tishman Speyer holding the other 30 percent.

Speaking about this overseas expansion by Vanke, Jingsong Du, a Hong Kong-based property analyst with Credit Suisse was quoted as saying, “They will go anywhere mainland Chinese want to go. Their target customer is mainland Chinese who want to migrate overseas, or have a home outside of the country.”

Moves similar to Vanke’s have recently been made by Greenland Group, which bought rights to a major residential project in Sydney last week, and Xinyuan Real Estate, which bought a Brooklyn residential site last year.

However, residential housing investment is not the only Chinese taste that US-based projects are hoping to indulge.

A Chinese Casino Comes to America’s Gambling Mecca

While real estate is a primary passion for wealthy Chinese, it may still come second to gambling.

Hoping to take advantage of this passion for cards, mahjong and other games of chance, the Malaysian gambling company Genting Group announced this month that it had agreed to purchase a partially developed Las Vegas site from its existing owner for US$350 million.

According to the Wall Street Journal, “Eyeing the growing influx of Chinese and other Asian tourists to Las Vegas, Genting plans to start construction on a new multibillion-dollar casino complex called Resorts World there next year.”

Genting paid $350 million for the property and will spend as much as $7 billion building on it, according to In a statement to the press, Genting Senior Vice President of Development Christian Goode said that the company is expecting to spend as much as US$7 billion on the project before it is completed. The company has a similarly themed resorts on Singapore’s Sentosa Island, one of just two casinos in Singapore. Genting, which already has achieved considerable success serving Chinese clients in Singapore envisions red-and-gold pagodas and a panda exhibit on the 87 acre site.

The project, which is due to open in 2016 is seen as a new gambling playground for rich Chinese to enjoy spending their money away from the watchful eyes of the government in their home country.

The property that Genting bought had been abandoned since 2008, and the deal is the biggest new investment on the Las Vegas Strip since then. According to a statement from US-based ratings agency Fitch, “We believe the property will target high-end Asian customers, which has been the principal catalyst for gaming revenue growth on the Strip since 2010.”

If the Chinese are coming to the US to spend their money, then the Asian companies accustomed to serving this client base are determined to make that same migration.

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