China Vanke Co., the biggest developer listed on Chinese exchanges, has entered a residential-property venture in San Francisco, its first foray into the U.S. real estate market.
The company signed the deal on Feb. 12, Chairman Wang Shi wrote on his microblog on Sina Corp.’s Twitter-like Weibo service, and confirmed by Vanke. The project will be a luxury high-rise condominium, according to statement today from the developer and its partner, New York-based Tishman Speyer Properties LP.
Chinese developers are starting to venture overseas, chasing wealthy locals who are buying apartments as the government restrains the property market at home. Xinyuan Real Estate Co. in September took control of a lot slated for more than 200 units of housing near New York’s Brooklyn waterfront for $54.2 million, a deal the Beijing-based company said was the first of its kind by a Chinese firm in the U.S.
“China Vanke has always been a company with a global view, good at learning from excellent peer enterprises,” Wang said in the statement. “We are entering the U.S. market to continue this learning process, to understand business models in a mature market and accumulate management experience through project cooperation.”
The San Francisco project at 201 Folsom St. will be two connected towers with a total of 655 units, the companies said in the statement. The site is across the street from the Infinity, another Tishman Speyer residential development, where prices ranged from $600,000 to $6 million.
San Francisco real estate prices have been surging, buoyed by growth in the technology industry. The median price of a home sold in San Francisco county jumped 16 percent last month from a year earlier to $699,000, according to research firm DataQuick.
The deal is Vanke’s first outside Asia and comes after the company’s Hong Kong unit jointly won a HK$3.43 billion ($442 million) bid for a site in that city, marking its entry into a new market. The developer, based in the southern Chinese city of Shenzhen, set up international units to expand overseas after it acquired a Hong Kong developer in May.
China Vanke shares fell 2.7 percent 11.7 yuan at the close of trading in Shenzhen, the lowest in three weeks.
“Good enterprises in the 21st century must have global and international vision,” Wang wrote in the microblog, commenting on the deal.
Vanke’s investment is pending approval from the Chinese government.