The proposed tower (at centre in this rendering) would form part of the South Street Seaport development

Chinese real estate developer Oceanwide Holdings is taking on its fourth US project after agreeing to acquire a pair of Manhattan sites for $390 million.

Oceanwide acquired the project through its Hong Kong-listed subsidiary, China Oceanwide Holdings, which announced last week that it had agreed to buy the two adjacent sites, at 80 South Street and 163 Front Street in New York from the Howard Hughes Corporation.

The sites have already received permission for redevelopment into a single tower, combining commercial and residential space, that could reach more than 304 metres (1000 feet) tall.

Oceanwide Holdings, which previously acquired several projects in California, is joining a rush of Chinese capital flowing into the New York property market, as China’s institutional and corporate investors head overseas in search of higher yielding investments.

Hughes Corp Turns 151% Profit in Nine Months

Hughes had assembled the site over the last nine months for a combined $155 million, by first purchasing the 80 South Street plot in December for $100 million, and then later paying out $31 million more to acquire air rights that would allow it build a supertall structure in the area. Then in March this year the Dallas-based company acquired the 163 Front Street site for $24 million.

The combined 14,718 square foot (1,367 square metre) site, which had been discussed as the future home of a supertall building since at least 2005, now figures to be built up into a tower that could yield 820,000 square feet (76,000 square metres) of new space. The current development rights allow for up to 440,000 square feet (40,877 square metres) of apartments, and 380,000 square feet (35,303 square metres of shops and offices.

Oceanwide Takes on New York

The acquisition in Manhattan’s South Seaport area is the fourth major deal for Oceanwide in the US, after the Beijing-based company previously bought three projects in Calfornia.

OCEANWIDE HOLDINGS US INVESTMENTS

The developer, which is controlled by China’s 17th richest man, Lu Zhiqiang, became one of the country’s first major investors in the California real estate market in in December 2013, when it acquired the Figueroa Central project in Los Angeles for $175 million.

Oceanwide continued its California focus in January of this year by purchasing the First & Mission project in San Francisco for $296 million, and picking up a Sonoma county resort site for $40.7 million.

Lu Zhiqiang, whose personal fortune is estimated by Forbes at $5.4 billion, is also rumoured to have been behind the $60 million acquisition of an office park in Sunnyvale, California in May of this year.

Chinese Investment in NYC Real Estate Reaches $2.6B

Oceanwide’s Lu Zhiqiang just picked up his fourth US project

Oceanwide’s decision to enter the New York market demonstrates the continued appeal of the US’s commercial capital to Chinese real estate investors.

In terms of investment transactions of $50 million or more, Chinese investors have committed $2.66 billion into the New York property market so far this year, already surpassing 2014’s full year total of $2.11 billion, according to Mingtiandi’s database of Chinese outbound real estate investments.

In addition to developers such as Oceanwide, China’s institutional investors have been attracted by New York’s high office rentals and mature market to acquire several properties and also take stakes in projects belonging to local developers.

Anbang Insurance, which last year bought the Waldorf Astoria for $1.95 billion, followed up in May 2015 by acquiring the Merrill Lynch Financial Center along Fifth Avenue for $415 million. During that same month, the Bank of China acquired the 7 Bryant Park office tower in New York for $600 million.

China’s Oceanwide Holdings Buys $390M NY Project in 4th US Deal