First it was London, and then New York. Now China’s real estate investors have moved on to Munich, as an agency managing the country’s foreign reserves is said to be acquiring an office park in the German city for $630 million.
Gingko Tree Investment, a unit of China’s State Administration for Foreign Exchange (SAFE) which manages the country’s more than $3.31 trillion in foreign exchange reserves is said to be negotiating with HIH Hamburgische Immobilien Handlung GmbH – which owns the 425,000 square metre office park – to acquire the complex which currently serves as offices for engineering firm Siemens AG.
According to research by BNP Paribas, Asian fund investors acquired Euros 2.1 billion in European porperties from January through December 2014, in part as a response to rising valuations in the US and UK. BNP’s research found that Asian funds bought 2.1 billion euros of properties in Europe in the first nine months of 2014, up from with 1.3 billion euros in the same period in 2013.
Gingko Continues Overseas Expansion
Although relatively late to China’s overseas investment party, Gingko Tree seems to be doing its best to catch up with its domestic rival, CIC.
In August this year, The Crown Estate, which manages the Queen of England’s real estate assets, announced that it had joined with Gingko Tree to buy a shopping centre in the UK for £345.5 million ($576.76 million).
Gingko Tree was China’s most active buyer in Europe’s real estate markets in 2013, acquiring stakes in 16 properties worth a total of $2.44 billion in the London, Manchester and other locations. Gingko’s Munich deal is said to be under negotiation through Gingko Tree’s partnership with Pramerica Real Estate Investors, a unit of Prudential Financial Inc. (PRU), according to people familiar with the proposed transaction.