With confidence in their hometown markets fading, Chinese investors are continuing to throw billions of dollars at United States real estate.
In the first half of this year, companies with Chinese backers accounted for $5 billion worth of U.S. real estate purchases, according to the Wall Street Journal.
That dollar volume is up 19 percent year-over-year, and if $7.9 billion in unclosed contracts are counted, Chinese investment appetite in six months has nearly eclipsed the $14 billion spent in all of 2015.
Those deals have involved some of the country’s most high-profile developments and properties. Just last month, the Journal reported, a group of Chinese firms including Greenland Holding Group and the Ping An Trust plunked down $171 million for a 42-acre strip of land abutting the San Francisco Bay. The group is now planning a $1 billion biotechnology development.
In Miami, the China City Construction Holding Group is hoping to develop both a major mixed-use project in Brickell and a residential tower in Miami Beach.
And in one of the biggest deals yet, Shanghai Municipal Investment, China’s largest state-run enterprise, partnered with Extell Development to build the luxury $3 billion Central Park Tower that’s slated to be the country’s tallest residential building.
Chinese companies are looking to diversify their investments as confidence in their local real estate markets is waning, the Journal reported. A government anti-corruption crackdown from President Xi Jinping is also putting pressure on firms to move their money offshore, as some local property sales have already been blocked.
“The vast majority are looking for development opportunities,” JLL’s Stephen Collins told the Journal. He said Chinese companies have development track records in their home country, and feel they can make a bigger profit from ground-up projects rather than investing in an existing building. [Wall Street Journal] —Sean Stewart-Muniz