After two major acquisitions in Los Angeles by Chinese real estate investors, the LA Times reports that major Chinese developers will continue to look at gateway cities like Los Angeles to get a foothold in the United states. With investment options slowing down within China, developers are looking for “shovel ready” projects that will return investments quickly and diversify assets outside of China.
Shanghai-based Greenland Group, who has projects in Asia, Australia, the U.S. and the U.K., is one of the few property developers getting involved in Los Angeles, with their Metropolis megaproject in the Financial District, which is rumored to involve a 19-story hotel and a 38-story residential tower. (It’s worth noting that Greenland is short $90 million in funds and will likely look for tax credits from the city.)
With the Chinese government looking to slow down land development to avoid a real estate bubble burst (a la United States circa 2007), Chinese developers will continue to look at population centers like L.A., San Francisco and New York, who have large Asian populations and major real estate opportunities. Laurie Lustig-Bower of the CBRE Group, who was involved in the Greenland Group deal, says that more Chinese Investment will be coming. “China may devalue its currency, so it behooves Chinese to move out as much money as they can now at its current value,” she said. “I think we’re on the front end of this wave.” It will be an interesting trend to keep an eye on.