China’s biggest real estate developer by sales continued to move beyond its traditional base in housing projects last week when Vanke picked up 160,000 square metres of industrial land in Shanghai.
The property giant bought the land in Zhangjiang High Tech Park together with local Shanghai partner, Tian An Cyber Park, with plans to use the new site to develop, lease and sell office park space.
This year Vanke’s leadership has been publicly pessimistic about China’s real estate market, and the company has diversified into other types of property projects in China, including retail malls and logistics facilities. The Shenzhen-based firm has also joined the ranks of China’s developers investing in real estate projects overseas.
Not Vanke’s First Office Project
While Vanke is best known for its development and sales of mid-market homes, this year the company was able to quickly lease out a new 60,000 square metre business park project in Qianhai – a district of Shenzhen which is aiming to compete with Shanghai’s free trade zone.
Vanke also has office projects in Qingdao, as well as in Zhengzhou, the capital of Henan province.
In the new development in Zhangjiang High Tech Park, Vanke says that it plans to hold onto 25 percent of the project for leasing, and will sell the other 75 percent to investors and occupiers. The 60,000 square metre first phase of the project is scheduled to begin sales in 2015 at RMB 25,000 per square metre, according to an account in the local media.
China’s Biggest Developer Sticks to Real Estate
While perhaps not wandering as far away from its core business as Evergrande has with its cooking oil venture or Wanda with its ecommerce initiatives, Vanke seems determined to hedge against the declining returns of China’s housing market.
During 2014 the company has announced a joint venture with Blackstone to develop warehouses, a cooperation with Baidu to create “intelligent malls,” and plans for investment in private hospitals.
Vanke has also headed overseas in recent years by investing in a 61-storey luxury housing project in Manhattan earlier in 2014, as well as teaming up with Tishman Speyer for a $620 million joint project in San Francisco during 2013.