Commercial real estate developments by builders based in China are becoming more competitive with those by such overseas competitors as Tishman Speyer Properties LP, the company’s co-chief executive officer said today.
Rob Speyer in December traveled to Chengdu and visited a project by a Chinese developer that would be a "world-class building" in midtown Manhattan, London or Frankfurt, he said. Speyer’s company, owner of New York’s Rockefeller Center, is investing in office, retail, residential and mixed-use projects in Chinese cities including Shanghai, Tianjin and Chengdu.
"It symbolized how the Chinese real estate business -- particularly the domestic builders -- have evolved and strengthened their position in the last 10 years," Speyer said during the Bloomberg Link China Investment Strategies conference in New York. "As a non-domestic developer, we’re going to continue to have to add greater degrees of value in order to have a competitive advantage."
Economic growth in China is fueling a real estate boom. Premier Wen Jiaboa pledged today to curb property speculation after January home prices posted their biggest month-over-month gain in six months, according to SouFun Holdings Ltd. The curb follows two interest rate increases in the past four months and a ban on third mortgages.
The World Bank estimates that China’s economy will expand 8.7 percent this year, three times the pace of the U.S. China’s expansion was 9.8 percent in the fourth quarter.
Tishman has invested in China for the past seven years, Rob Speyer said. Among the projects being built through the company’s China fund is a Chengdu development that includes a residential tower, offices and retail space. Construction of the project’s second phase is likely to begin this quarter, according to the developer.
Properties in the company’s portfolio include the Chrysler Building and Rockefeller Center in New York and the MesseTurm in Frankfurt. Tishman has developed or acquired 116 million square feet (10.8 million square meters) of real estate, valued at more than $50.2 billion, since its formation in 1978, according to the company’s website.