Fosun NYCA 3D rendering of the 47-storey New York tower (Image courtesy of Fosun)

Fosun Group, China’s largest private investment firm, made its second US property investment last week when it bought a stake in a 47-storey luxury residential project on New York’s Madison Avenue.

For the project, Shanghai-based Fosun is partnering with a US developer in the company’s first development project in the US market, after buying the former Chase Manhattan Plaza in in New York for $725 million in 2013.

The investment conglomerate which is heavily involved in the mainland housing market, has already bought into luxury residential projects in Australia, and its latest deal comes amidst a surge in Chinese interest in the New York property market.

New York Developer Sought Fosun as Partner

Fosun acquired an undisclosed stake in the 32,500 square metre (350,000 square foot) luxury building near the Empire State Building from New York developer JD Carlisle for an undisclosed sum.

126 Madison AvenueThe area around 126 Madison Avenue how it looks today. (Image via PropertyShark).

The development project is being built on a site aggregated by JD Carlisle, which the US developer then presented to Fosun as an investment opportunity. According to a statement from the Shanghai-based firm it will be the first overseas project that Fosun will be involved in from the early stages, and the new partners expect to begin construction on the 180 unit tower in the third quarter of 2016, with completion expected in 2018.

Fosun, which owns major mainland property developer Forte, follows other Chinese property firms such as Greenland Group and China Vanke into the New York housing market. Greenland Group, which is China’s largest developer by sales took a major stake in the $4 billion Brooklyn Yards project in 2013, and in early 2014, Vanke partnered with New York developer RFR for a 61-storey luxury condo project in Manhattan.

Late last month, noted New York investment broker Robert Knakal predicted that Chinese investment in the city’s real estate could reach $50 billion over the next few years after it jumped 43 percent to reach $3 billion in 2014.

Fosun Expecting to Market to Chinese Buyers

Besides perceiving the New York market as undervalued following a long US downturn, Chinese developers, such as Fosun, are bullish on their ability to market housing in New York to wealthy Chinese buyers.

“We have the ability to source building materials from China and also bring Chinese buyers to a development like this,” noted Erik Horvat, who heads Fosun’s New York office. The Fosun executive noted that the company, which is headed by Chinese billionaire Guo Guangchang is also looking into more projects in New York, both with Carlisle and with other potential partners.

After a downturn of more than one year in China’s domestic real estate market, the mainland’s newly wealthy classes are turning to overseas real estate as a refuge, and New York’s market has been a particular draw.

A co-founder of China’s Hainan Airlines has spent more than $94 million to buy two Manhattan condos in the last three months, and an unnamed Chinese buyer paid the highest price of the first quarter for a home in New York by purchasing a full floor Fifth Avenue apartment for $70 million during March.

Fosun Buys Stake in 47-Storey NYC Luxury Tower

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