China’s most aggressive overseas real estate investor broke ground on a $5 billion development project in New York yesterday and vowed that more deals will be on the way. But not necessarily in more cities.
Shanghai’s Greenland Group joined with partner Forest City Ratner, as well as New York mayor Bill Blasio and other officials, to formally launch construction of a new tower in Brooklyn’s Pacific Park Project, which was formerly known as the Atlantic Yards.
In a statement, Greenland chairman Zhang Yuliang said that the state-owned developer was already enjoying a 30 percent increase in its overseas revenues this year, and promised to double that in 2015.
However, cities that are hoping to benefit from the prolific developer’s investment spree could be disappointed, as the company – which has already invested in 13 cities across nine countries within the last two years, said that it wants to focus on big targets.
China’s Biggest Overseas Investor Sticking with Global Gateway Cities
Speaking at the ground-breaking ceremony, Zhang called the start of the new building “an important first step,” and speaking after the event, the developer predicted more projects in the cities where Greenland already has a foothold.
“We will focus on deepening our presence in existing markets,” Zhang was quoted as saying in the Wall Street Journal. In North America, those communities would include Los Angeles and Toronto – in addition to New York. However, the developer also said that it was on the lookout for opportunities in San Francisco and Chicago.
Greenland already has projects in Sydney and Melbourne in Australia, in Malaysia just across the border from Singapore, and in London, as well as other cities.
Zhang went on to point out that Greenland, which has committed to development projects estimated to be worth $20 billion, is limiting its search for new locations. “It isn’t like we have a presence in 10 places now and will have to expand to 20,” Zhang told the Journal. “We’d increase our investment in cities where there is potential for growth, in the big cities.”
Greenland Expects to Double Its Overseas Sales
So far Greenland’s outbound strategy appears to be paying off, as the company’s sales from overseas projects are expected to reach $3.9 billion this year, according to a report in Reuters. If realised, this would represent a 30 percent increase over 2013 revenues from overseas projects.
For next year, Zhang is aiming for even bigger things – setting a target for sales of projects outside of China at RMB 40 billion ($6.46 billion) for 2015.
Chinese Buyers Eager for What Greenland is Selling
Much of the sales for Greenland’s projects come from Chinese customers in its home market, who are hungry for a chance to own property in global cities.
In the case of a project that Greenland bought in Sydney, Australia in 2013, after acquiring the site in March, by the beginning of December last year the developer had already successfully sold RMB1.5 billion (US$242 million) in homes. Most of the sales were to buyers in China, and all of them were for a development which had not yet broken ground.
In the US. Greenland said that it expects its Metropolis project in Los Angeles, which broke ground in February, to provide RMB 4 billion ($646 million) in sales this year.