Kuafu Properties, the New York-based developer owned by China-based investors now owns the rights to more than 1 million square feet (92,000 square metres) of New York real estate, less than one year after entering the US market.
The latest addition to the fledgling Chinese developer’s portfolio is 1 MiMA Tower, a condo complex composed of the top 13 floors of Related Companies’ MiMA building on Manhattan’s 42nd Street, which Kuafu purchased from the US developer for $260 million, according to a statement from Kuafu this week.
The acquisition is Kuafu’s fourth since July last year, and its second in less than a month as Chinese investment in New York real estate continues to accelerate. Despite rapidly rising prices, investors from mainland China continue to be drawn to mature assets and development projects in America’s commercial capital.
151 More Manhattan Apartments
Kuafu is buying the top 13 floors of the 63-storey building with plans to sell off what originally had been rental apartments as condominiums to home buyers looking for their own piece of the Big Apple.
“This is an exciting acquisition, because of everything One MiMA Tower offers residents,” said Kuafu CEO Shang Dai. “With spectacular views, inspired design and world-class amenities, One MiMA Tower units will fill a void in New York City’s residential market by offering ultra-luxury residences at a more attractive pricing to other new development offerings.”
The project is expected to yield 151 units with sources estimating that prices will start at around $1.5 million. The condos are expected to hit the market late this year or early in 2016, with delivery being expected shortly thereafter.
Transplanted Company Putting Down Roots in New York
If you haven’t heard of Kuafu before and are surprised by the string of deals by the Chinese-backed company, don’t feel bad, the company splashed onto the scene abruptly in 2014 with its first major acquisition, a site for a 380,000 square foot (35,303 square meter) tower in Midtown Manhattan’s Hudson Yards.
The Chinese developer teamed up for that project with two local New York companies to pay a reported $62 million for the mixed-use site.
Then last month Kuafu hit the headlines once again with its solo purchase of a residential site on Manhattan’s Upper East Side for more than $300 million.
The New York company was apparently formed shortly before its first acquisition by executives associated with China State Construction and Engineering Company (CSCEC). The state-owned builder, which is China’s largest, is also a major investor in both property and construction in the US.
Kuafu chairman Shan Zengliang, co-founded and remains an executive with CCDI, a design firm owned by CSCEC, and Shang Dai, the CEO, formerly worked as an in-house counsel with the construction giant.
Shanghai Construction Group, which dominates the market for major building projects in China’s biggest market for commercial property is investing in One MiMA Tower with Kuafu, according to the company’s statement, and Related will maintain a role as property manager and development advisor to the new owners.
Chinatown in Manhattan
Kuafu’s latest project is one of a growing number by Chinese developers and investors in New York, many of whom seem spurred by surging interest from mainland homebuyers in overseas investment.
In May, Chinese private investment group Fosun bought an undisclosed stake in a 47-storey luxury residential project on New York’s Madison Avenue, and China’s two largest developers, Greenland Group and Vanke both have projects in the city now. Greenland broke ground on its project at the Atlantic Yards earlier this year, and Vanke is working with US developers RFR and Hines on a 61-storey residential tower in Manhattan.
NYSE-listed Chinese developer Xinyuan Properties is widely credited for having kicked off the Chinese development boom in New York with its 2012 acquisition of a site in Brooklyn for a project which is now on the market.
For these residential development projects at least some of the impetus comes from record-setting purchases of US homes by Chinese.
Home buyers from mainland China, Hong Kong and Taiwan together purchased $28.6 billion worth of US residential property in the period from April 2014 to March 2015, according to a report released recently by the National Association of Realtors. The total for Chinese investors was more than double the $11.2 billion in housing purchased by Canadians, who were the next biggest foreign buyers in the US.