One of China’s biggest state-owned builders doubled-down on the Miami real estate market this past week when a US subsidiary of China City Construction bought a site in Miami Beach for $38.5 million.
China City Construction joined with Chinese partner, American Da Tang Group to acquire the 3,965 square metre site along North Beach’s Collins Avenue from US developer Peebles Corp, after the New York-based builder backed away from the project, calling it too small to develop.
The North Beach deal is the second property acquisition for the Chinese state-run firm and its partner,American Da Tang Group, in south Florida after the two companies teamed up last December to buy a site in Miami’s Brickell neighborhood.
With this latest deal, Beijing-based China City Construction moves up in the growing ranks of Chinese state-owned giants that are pursuing expansion opportunities globally.
US Developer Makes $34 Mil Return in 5 Years
Although Peebles passed on the chance to develop the site itself, the US developer was quick to praise the project’s potential.
“One of the last vacant oceanfront properties on Miami Beach – one of the hottest real estate markets around the globe – the site is a prudent investment with immeasurable potential,” chairman and CEO Don Peebles said in a statement. Peebles said that one reason that it chose not to move forward on the project on its own is that it has decided to focus on projects in the northeastern US where it is based.
The investment was still a profitable one for Peebles, however, after the two sides finalised their agreement on Thursday this week at a price some $33.9 million more than the $4.6 million that the US developer had paid for the site in 2010, according to an account in the Miami Herald.
Sources familiar with the project said that the site at 6747 Collins Avenue had previously been approved for construction of 60 residential units or 150 hotel rooms. However, the new owners have not stated their plans for developing the property.
China City Construction Likes Miami
According to a statement from American Da Tang Group, the North Beach site will be developed in coordination with the Brickell site that the two Chinese firms bought last year for $74.8 million.
“This beautiful property will be a developed to complement our group’s planned multi-use development across Biscayne Bay in Downtown Miami,” Shanjie Li, CEO of American Da Tang said in the statement. In September, Li had announced that the Brickell project would begin construction in early 2016.
Following the lead of China’s sovereign wealth funds, Chinese state-owned corporations have become some of the country’s biggest acquirers of real estate assets globally. In addition to China City Construction, a subsidiary of China State Construction Engineering Co (CSCEC), has acquired three residential sites in New Jersey. The company, which is China’s largest construction firm, also is the principal backer of the troubled Bahamar resort project in the Bahamas.