HK’s Great Eagle Buys SF Site Near Twitter for $19.8M

Hong Kong developer Great Eagle has become the latest Chinese real estate company to bet on San Francisco’s property market by purchasing a development site in the city’s Central Market area for $19.8 million, according to public records.

Great Eagle has now bought three real estate projects in San Francisco in the last 18 months, as real estate in the west coast city continues to be a magnet for Asian capital.

The land at 1125 Market Street was the last remaining vacant lot in San Francisco’s Central Market neighborhood, and is just two blocks from Twitter’s headquarters in an area that has rapidly grown in favor with technology companies.

Great Eagle Pays 2.5 Times the 2012 Price

Demand for property in the city by the bay has reached the level that when Great Eagle’s US subsidiary, Pacific Eagle, bought the 1151 square metre (12,400 square foot) lot from McFarlane Partners on May 22nd, it paid 2.5 times more than the $7.8 million that the US investment company had spent to purchase the site in 2012.

The Hong Kong group says it still has not decided what to do with its new acquisition, according to comments made by a Pacific Eagle executive, but the site is zoned for building residential, retail or entertainment space up to 37 metres (120 feet) in height.

Great Eagle’s previous San Francisco deals covered both commercial and residential projects. In March of this year the Hong Kong firm spent $21 million to buy a site zoned for condo development at 1545 Pine Street in the city, and in late 2013 Pacific Eagle went commercial in acquiring an office building on Mission Street for $179 million.

Great Eagle, which is controlled by property scion Ka Shui Lo, has maintained an office in San Francisco for 22 years, and its US subsidiary, Pacific Eagle is said to invest globally. Ka Shui Lo is the older brother of Shui On Group chairman Vincent Lo, who became famous in China for the development of the Shanghai landmark, Xintiandi.

San Francisco Attracting More Asian Capital

Despite a recent rise in prices of real estate assets and development sites in San Francisco, Great Eagle’s acquisition shows the city’s ongoing appeal with Asian investors.

Property players from the mainland have snatched up more than $600 million in commercial assets, multi-family housing and development sites over the last two years, according to data from Real Capital Analytics, and major companies such as China Vanke and Guangzhou R&F have helped make San Francisco, along with Sydney, London and New York, among the hottest real estate markets globally.

Vanke, which is China’s second-largest developer by sales, teamed up with Tishman Speyer two years ago for the now wildly successful Lumina condo project in the city, and since then Guangzhou R&F – also a top ten developer in China – has acquired three sites in San Francisco and another in San Jose. Earlier this year Chinese developer Oceanwide Holdings spent $296 million to acquire a site approved to build two condo towers at First and Missions Streets in San Francisco.

Besides the residential developments, Great Eagle’s latest acquisition is only one mile up Market Street from 225 Bush Street, an office project that mainland developer Genzon Group acquired last year for $350 million.

With China having recently signalled that it will allow still more capital to exit the country in search of investment returns, San Francisco’s real estate market could be in line for more Asian-sourced deals in the months and years to come.