US Commercial Developers Learning the China Real Estate Ropes

10-Feb-2012

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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.







By , mingtiandi,

Despite some mis-steps in the past, American real estate developers are starting to make significant investments in China’s commercial property market. Major US retail developers Simon Property Group, and Taubman Centers, as well as other players such as Hines Interests of Houston, and Tishman Speyer of New York, along with Ivanhoé Cambridge of Canada, are all developing projects in China, primarily in the retail sector.

According to a recent story in the New York Times, these North American real estate developers are competing with each other to develop new projects across China,

 

Of the commercial property sectors, retail seems to offer the greatest opportunities for foreign investors. American developers have played only a minimal role in the tightening office market in Beijing and Shanghai. Hines developed the new 21st Century Tower, a 49-story office building in Pudong with a Four Seasons Hotel, but sold its stake last year to a Hong Kong company.
Western hotel brands are rapidly adding to their management contracts in China, but few foreign companies are developing or investing in the hotels themselves, said David Ling, in charge of China and Southeast Asia for the consulting company HVS Global Hospitality Services.
But some foreign retail developers are venturing into second- or even third-tier cities — populous places where the modern shopping center is often a novelty. That strategy is not without risks. “There’s not a lot of historical data to do your planning,” said Sanjay Verma, Cushman & Wakefield’s chief executive for Asia and the Pacific.
Retailing specialists say local mall developers are not currently seeking foreign capital but can profit from Western expertise in design, merchandising and attracting the right mix of tenants. “Partnering with somebody with experience will help them on leasing and builds up the confidence of the retailer,” said Siu Wing Chu, a senior director at the international brokerage Savills.

Of course, while the retail real estate sector is China’s sexiest right now, it can also be the most difficult to manage, and require the most on the ground expertise in order to be successful.  And it is just this on the ground expertise that US developers are likely to lack.

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