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China Vanke bought 70 per cent of 201 Folsom Street, a mainly high-end residential project owned by Tishman Speyer Properties, Credit Suisse said in a research note on Monday.
Wang Shi, chairman of China Vanke revealed that the deal would be signed on February 13, writing on Sina Weibo, the Chinese micro-blogging site.
“Good enterprises in the 21st century must have global and international vision,” Wang wrote in the microblog, commenting on the deal.
Vanke is based in the southern Chinese city of Shenzhen and has recently set up international units to expand overseas.
Mark Hughes, executive business editor of China Daily and a visiting professor of media studies at Beijing University of Foreign Studies told The BRICS Post, “I, for one, shall be watching this move with great interest.”
“It’s an interesting move by China Vanke and clearly part of China’s ongoing ‘Going-out policy'”, says Hughes.
“The relatively small size of the deal suggests it is testing the water in the US property market, where there have been signs of an uplift in some areas, first before making a grander move,” Hughes told TBP.
China Vanke suspended trading on the Shenzhen bourse on December 6 2012, saying the company is “planning important matters,” according to a statement, quoted by Xinhua.
The real estate giant revealed strong December 2012 sales figures, as China’s real estate market continued to warm up at the end of last year.
The San Francisco venture is China Vanke’s first outside Asia and will target mainland Chinese buyers, according to China Vanke management cited by Credit Suisse.
“San Francisco will always remain desirable and has a huge Chinese population. There are also indications that rich Chinese in China are increasingly looking to park big assets abroad for a number of reasons, not least that people can only buy property in China for a maximum 70-year lease,” reasoned Hughes.
The company sold 1.17 million square metres of residential and commercial properties in China in December alone, generating revenue of $2.2 billion.
This was up 94.9 per cent and 141.8 per cent year on year, respectively, the company said in a monthly report filed to the Shenzhen Stock Exchange.
Established in May 1984, China Vanke is the largest residential property developer in the People’s Republic of China and has more than 16,000 employees.
The BRICS Post