Sunday, October 26, 2014

Chinese are coming!

As Anbang Insurance Group, a less known Chinese insurer, purchased the iconic 1232 room New York hotel Waldorf-Astoria for $1.95 bn, the Times writes,
Chinese companies, in particular, have made a splash of late by buying New York real estate. Fosun International bought One Chase Manhattan Plaza, the downtown office building, for $725 million last year. SOHO China and a Brazilian billionaire bought a 40 percent stake in the General Motors Building. And in Brooklyn, Greenland Holding Group bought a 70 percent stake in the 22-acre development now called Pacific Park that had been known as Atlantic Yards.
As Bloomberg writes, this has striking similarity with the wave of Japanese purchases of US real estate in the eighties,
The surge in Chinese real estate investment overseas is reminiscent of the Japanese wave of property purchases in the U.S. and other countries in the 1980s, which included New York’s Rockefeller Center and California’s Pebble Beach golf course. Many Japanese buyers were forced to sell when the US fell into recession. 
And Jamil Anderlini points to the reversal of aggregate capital flows, as China emerges as a net capital exporter, on the back of its $4 trillion war chest of foreign exchange reserves,
Outbound direct investment rose 21.6 per cent in the first nine months compared with last year to $75 bn...  In 2002 Chinese investors spent just $2.7 bn on acquisitions and greenfield projects abroad but by 2013 the total had increased 40-fold to $108 bn... outbound investment could come in at close to $130 bn for 2014.

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