China's Vanke eyes global expansion

Many Chinese home buyers have been shut out of the property market on the mainland because of government steps to cool the domestic property market. That's why now more and more Chinese developers are looking overseas to tap into the rising demand of Chinese investors.

With the Chinese government restraining the property market at home, Chinese developers are starting to venture overseas.

China Vanke, the biggest real estate developer listed on Chinese exchanges is one of them. The company will invest about 110 million US dollars for a 30% stake in an upscale condominium project in Singapore.

Chairman Wang Shi says many of Vanke's customers have emigrated abroad . About 30 percent of them have chosen America as their destination of choice or look to the USA or Canada as the ideal home ground for their second or third house.

And capitalizing on the trend, China Vanke, has teamed up with US real estate titan Tishman Speyer Properties to develop two high-rise residential condominium towers in California.

"We are going to be developing a fantastic residential project in San Francisco in the south of the market district. It's gonna have 655 units and it will actually be the largest condominium project ever developed in San Francisco", Rob Speyer, co-CEO of Tishman Speyer said.

China Vanke will take a 70 percent stake in the project, but it isn't going to build the towers-Tishman has sole responsibility for that however. It will play a role in marketing units in China.

And according to the China News service over 200 units have already been presold to mainland Chinese investors. According to documents by Tishman Speyer, it expects 40% of the project to be sold to Chinese investors and Chinese migrants.

Also trying to cater to demand from Chinese buyers is Shanghai-based Greenland Group. In March it bought a residential and hotel project in Sydney.

And In September of last year, Xinyuan Real Estate bought a lot slated for more than 200 housing units near New York's Brooklyn waterfront for about $54 million. Xinyuan says the deal was the first of its kind by a Chinese firm in the U.S.

"We view Chinese real-estate developers and Chinese investors entering into the U.S. as a very positive trend. The U.S is really the center of globalization for the real-estate industry and the more capital and the more companies that do business here, the better for our marketplace", Rob Speyer, said.

Vanke is a household name in China, with operations in 60 cities around the country. Sales reached $22.8 billion in 2012, up 16% from 2011. The China Vanke/Tishman Speyer deal will allow it to test the waters for future construction ventures in the US. Ground breaking for the San Francisco Towers is expected this summer and the project is scheduled for completion in 2016.