International investment continues to impact the housing sector recovery, as a Chinese state-owned developer currently figures to control a majority stake in one of New York’s most prominent neighborhoods. The investor, in this particular situation, is a Shanghai-based conglomerate by the name of Greenland Holdings Group. Having already purchased over $1 billion of land in Los Angeles earlier this year, the developer intends to become the majority stake holder in New York’s Atlantic Yards, a division of Brooklyn.
Greenland Holdings Group will reportedly own 70 percent of a joint venture established with Forest City Ratner Companies. The collaborative effort between the two will develop a vast commercial and residential project in Brooklyn. The Chinese developer has acknowledged that the proposed project will exceed $5 billion, making it the largest Chinese investment in U.S. real estate ever.
While interest in U.S. real estate by Chinese investors has increased over the last year, previous projects fail to meet the grandiose expectations of their most recent acquisition in New York. To date, it will easily be the largest Chinese investment on U.S. soil and will certainly highlight Greenland’s rise as an investor power. This particular development will simultaneously place the investment company at the center of one of New York’s largest urban renewal projects in decades. This is perhaps one of the driving factors behind the joint venture.
“Greenland believes that the U.S. market is bullish,” said Zhang Yuliang, chairman of Greenland Group. “The U.S. economy is recovering, which brings ample liquidity to the market and a stable rate of return. The real estate development prospect is generally optimistic.”
The joint venture is expected to target immigrants, Chinese investors and the “white collar” New York community.
As early as May, Greenland Group completed a backdoor listing on the Hong Kong stock exchange by acquiring control of a smaller listed company. The move was a preemptive attempt to make raising funds easier for the overseas investment.
The recent New York acquisition should come at no surprise to those familiar with the recent moves made by Greenland Group. Outside of China, the property-investing conglomerate has broken ground on projects in nine cities across six countries, including South Korea and Thailand. Recent investments also include a $500 million purchase in Sydney and a complex in Los Angeles for $1 billion.
Mr Zhang said Greenland was looking for foreign partners, but only up to a point. “We need to work closely with overseas companies in the fields of market research, planning and design, and legal consultations. However, Greenland would never be only a financial investor, instead it insists on being a developer and operator,” he said.