CHINESE DEVELOPER BUYS NYC SITE FOR $300 MIL

21-Jul-2015

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Shan ZengliangKuafu chairman Shan Zengliang is a co-founder of one of China’s biggest state-owned architecture firms

New York-based Chinese real estate developer Kuafu Properties took on its second major US project this month when it bought a residential site on Manhattan’s Upper East Side for more than $300 million.

The 20,000 square foot (1858 square metre) site can be developed into over 280,000 buildable square feet (26,000 square metres) above grade, and is located across the street from Bloomingdale’s flagship store on East 60th Street in one of New York’s most upscale areas.

The acquisition by Kuafu comes as Chinese became the biggest overseas buyers of US homes, as total investment by individuals from mainland China, Hong Kong and Taiwan reached $28.6 billion last year.

Chinese Home Buyers Encourage More Chinese Development in the US

Kuafu acquired the development project from local developer World Wide Group, who had been buying up properties to assemble into a single site for the past nine years, according to an account in New York-based real estate publication The Real Deal.

The Chinese developer reportedly signed an agreement last week to pay $1,100 per square foot for the site, but has not yet stated what its plans are for the project. Cushman & Wakefield marketed the site on behalf of Worldwide, and Kuafu reportedly did not use a broker on the transaction.

The Upper East Side project is the latest major development deal for a Chinese investor in New York, which remains one of the primary targets for real estate investment, despite rapidly rising prices.

Last month, Chinese private investment group Fosun bought a stake in a 47-storey luxury residential project on New York’s Madison Avenue, although financial terms were not disclosed. China’s two largest developers, Greenland Group and Vanke both have projects in the city now, with Greenland having broken ground on its project at the Atlantic Yards this year, and Vanke working with US developers RFR and Hines on a 61-storey residential tower in Manhattan.

NYSE-listed Chinese developer Xinyuan Properties is widely credited for having kicked off the Chinese development boom in New York with its 2012 acquisition of a site in Brooklyn for a project which is now on the market.

Home buyers from mainland China, Hong Kong and Taiwan together purchased $28.6 billion worth of US residential property in the period from April 2014 to March 2015, according to a report released recently by the National Association of Realtors. The total for Chinese investors was more than double the $11.2 billion in housing purchased by Canadians, who were the next biggest foreign buyers in the US.

Beijing Architect Branches Out into US Housing

Kuafu, which is controlled by Shan Zengliang of Chinese architecture heavyweight CCDI, made its first foray into New York real estate last year when it partnered with two New York developers to develop the proposed Hudson Rise condo-hotel project in Brooklyn.

That venture has seen become mired in a legal dispute between Kuafu and one of its partners, which may have encouraged the Chinese developer to go solo on this latest project.

And while still a new company, Kuafu appears to be pack serious mainland muscle. The developer’s chairman, Shan Zengliang lists co-founder of China Construction Design International (CCDI) on his resume, and the Tianjin-trained architect continues to serve with the company as he has since 1994.

CCDI is no ordinary architecture firm either. Best-known for having designed the “Water Cube” aquatics centre where the swimming events were held for the Beijing Olympics, the company is now a subsidiary of Chinese construction giant CSCEC (China State Construction Engineering Corporation). CSCEC is itself a significant investor in the US, having acquired a development project in New Jersey and New York builder Plaza Construction.

Chinese Developer Buys NYC Site for $300 Mil


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