China’s most aggressive acquirer of overseas real estate assets bagged four more trophies at a cost of $880 million last week as acquisitions by Shanghai’s Fosun Group were revealed in Italy and Australia.
The investment conglomerate, which takes Warren Buffett’s Berkshire Hathaway as a model, agreed to buy a historic office building in central Milan for 345 million euros ($372 million), in the company’s latest European acquisition after it successfully closed on its €939 million ($1.12 billion) deal for Club Med in January.
Further south, a new Australian partner of Fosun revealed that the Shanghai company would be investing $508 million in three of its residential developments in Sydney and Brisbane. The residential deals come after the company run by Chinese billionaire Guo Guangchang bought a Sydney office building for $93 million in January.
This latest investment burst by Fosun is likely to intensify in the coming months amid signs that the company which first became front page news with its $725 million purchase of the Chase Manhattan Tower in 2013, has plans to invest much more in real estate globally, particularly in the United States and Europe.
Fosun Buys a Palazzo of Its Own
Fosun’s Italian acquisition is the Palazzo Bruggi, according to a report by Reuters. The building, which is also known as the Palazzo del Poste, borders Milan’s Piazza Cordusio square, and until recently was the headquarters of Italian bank UniCredit.
The 1901 building formerly housed Milan’s stock exchange and its acquisition is seen as a major vote of confidence for the real estate market in Europe’s third-largest economy.
According to reports in the Italian press, Fosun pushed aside all competitors to submit a winning bid for the modern Italian palace, putting down a €40 million cash deposit last week to seal the deal. The company is said to not yet have a development plan for its new European trophy, however, the downtown site is conveniently located near the site of the Milan Expo 2015 which starts next week and runs until the end of October.
$508 Million for Aussie Apartments
In Australia, Fosun is teaming up with local investment firm EG Funds Management to develop two residential projects in Sydney, and a third in Brisbane, as the country’s housing prices continue to climb and more Chinese buyers move in.
Fosun’s property development subsidiary, Forte, has signed a deal to invest A$650 million ($508 million) in return for a 75 percent stake in a company developing the three luxury housing projects. Together, the developments would bring 1000 new homes onto the market in the two Australian cities, according to a report in the Australian.
In January, Fosun joined with Australian investment firm Propertylink to acquire an eleven-storey office building in Sydney, Australia for A$116.5 million ($93 million). The company also bought two Tokyo office buildings in 2014.
In an official statement, Forte chairman Zhihua Chen said, “During the development process, Forte and EG will combine our expertise to develop better products. In the meantime, Forte will also gradually increase its overseas investment scale.”
Touring the US and Shopping for Cushman & Wakefield
For Fosun these latest property acquisitions are the latest milestones in a crescendoing set of asset purchases across the leisure, finance, real estate and other industries.
While Palazzo Bruggi is the conglomerate’s first Italian real estate deal, Fosun has already bought the Lloyd’s Chambers building in London, as well as investing in development project in Athens. Last year the company, which was started by a group of Fudan university classmates, also bought two office buildings in Tokyo.
According to sources familiar with Fosun’s operations, next month the veloci-investor will send a team to the US to scout out more real estate deals in San Francisco, New York, Boston and Miami.
The Shanghai-based company is also said to be competing with compatriot firm Ping An Insurance to buy a Berlin landmark, bidding on UK resort operator Center Parcs, and reportedly is making an offer for property consultancy Cushman & Wakefield.