China’s Greenland Buys Stake in Los Angeles Project
Shanghai Greenland Group Co., the developer building one of China’s tallest towers, is investing $1 billion in a downtown Los Angeles project, the latest Chinese builder to venture overseas.
Shanghai Greenland signed an agreement to acquire a stake in the project from California State Teachers’ Retirement System, the state-owned Chinese developer said in an e-mailed statement. It is the biggest deal of its kind by a Chinese developer in the U.S., Shanghai Greenland said.
Chinese developers are expanding overseas as the government maintains curbs on residential property at home to damp price gains. China Vanke Co. (000002), the biggest homebuilder listed on mainland exchanges, said in February it entered a residential-property venture in San Francisco, while Xinyuan Real Estate Co. (XIN) in September said it was developing a New York project.
“We are extending the China market abroad, and we prioritize our investment to countries where Chinese immigrants, students and tourists like the most,” Zhang Yuliang, chairman of Shanghai Greenland, said in the statement.
Michael Sicilia, a Calstrs spokesman, said the transaction took place this week and declined to comment on the reason the pension fund sold the stake. Christy Ingle, a spokeswoman for CBRE Group Inc. (CBG), the listing brokerage, declined to comment on the sale.
The 25,600 square-meter (275,450-square-foot) Metropolis project -- on Eighth Street near the L.A. Live development that includes the Nokia Theatre and Ritz Carlton -- will have hotels, offices, apartments and luxury homes. Construction is expected to start this year, Shanghai Greenland said.
Demand from overseas investors has been rising in downtown Los Angeles. MPG Office Trust Inc. (MPG) in June sold the U.S. Bank Tower, the West Coast’s tallest office building, to Singapore-based Overseas Union Enterprise Ltd. (OUE) for $367.5 million.
The Ritz-Carlton, located on the top floors of a JW Marriott hotel, has sold 85 percent of its 224 housing units, Jack Skelley, a Ritz-Carlton Residences spokesman, said on June 21. The remaining units probably will be sold by the end of the year, with “a huge share” going to Asian buyers, he said.
New York developer Joseph Moinian last month said he is marketing downtown Los Angeles land planned for a high-end retail, hotel and residential project.
Shanghai Greenland, the closely held company set up in 1992, said in 2010 that it will invest 30 billion yuan ($4.8 billion) to develop a 606-meter skyscraper in the central city of Wuhan. China’s tallest building currently is the 492-meter Shanghai World Financial Center.
The developer said yesterday that its A$480 million ($446 million) redevelopment project in Sydney announced in March has obtained approval from the Chinese regulators and sales will start this year. Zhang expected the company’s new overseas investments this year to be 10 billion yuan, according to the statement.
Calstrs, the second-biggest U.S. pension fund, managed about $165.8 billion of assets as of June 30, according to its website.
Vanke and Tishman Speyer Properties LP, the owner of New York’s Rockefeller Center, are planning two residential towers in San Francisco that will cost $620 million, Rob Speyer, Tishman’s president and co-chief executive officer, said in February.
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