Is The Last Big Powerful Commercial Real Estate Buyer, China, Leaving Soon?

According to Brookfield Property Partners CEO Brian Kingston, this pullback won’t affect real estate prices.

By Team Agorafy August 22, 2017
Photo by Zoltan Kovacs on Unsplash

It is not a secret that commercial real estate in big cities around the world has been one of the most desired businesses for Chinese investors and companies over the last decade. But things could change rapidly since China is moving to curb domestic companies’ investments abroad, limiting overseas investments in real estate and other industries, including sports and entertainment. Is the last big powerful commercial real estate buyer, China, leaving soon?

HNA, Dalian Wanda, Anbang Insurance, and Fosun International are among the most prolific group of Chinese conglomerates that have heavily invested in Manhattan’s real estate. In terms of commercial real estate, it was not until 2013, when Chinese’s investment showed real power. According to Morgan Stanley, cited by Bloomberg, Chinese firms have acquired $17 billion worth of commercial properties.

Related: A New 20,000-Square-Foot Megamansion Might Be Coming To Manhattan’s Greenwich Village

The Chinese government is  encouraging companies to invest money into projects related to the “Belt and Road” project.  This part of the President Xi Jinping’s signature foreign policy initiative that seeks to link China with other parts of Asia and eastern Europe through multibillion-dollar investments in ports, highways, railways, power plants and other infrastructure.

According to Brookfield Property Partners LP, there is no need to be concerned since for commercial real estate prices are sustainable even as Chinese regulators tighten restrictions on overseas investment. In a Bloomberg Television interview, Officer Brian Kingston commented that there is enough capital pouring into real estate from multiple regions-including Europe and the Middle East -to counter any potential slowdown in Chinese investment.

There are still big transactions happening in the city. For example, the Chinese conglomerate, HNA Group Co. made the headlines in March of this year. They agreed to buy 245 Park Ave. for $2.21 billion. This is by far one of the highest prices ever paid for a New York skyscraper. They got it from Brookfield and its partner in the property, the New York State Teacher’s Retirement System.

Related: New Retail Strip Is Coming To Astoria Area With A Troubled Past

Now, what it is interesting is the fact that most of HNA’s funding for this deal was borrowed from China’s state-owned banks. But HNA also borrowed $508 million from JPMorgan Chase, Natixis, Deutsche Bank, Barclays, and Societe Generale. This is the common process for Chinese companies: borrowing from China and getting some funding from offshore sources.

In addition, US and European banks are getting a bit skeptical about funding these deals. According to Business Insider, Bank of America, for example, has already pulled back from doing business with HNA — “We simply don’t know what we don’t know, and are not prepared to take the risk,” BofA president for Asia Pacific, Matthew Koder, had said in an internal email.

Despite China limiting overseas investments in real estate, it seems that Europe and the Middle East could potentially take over. Yet, China remains a strong buyer in Manhattan.

Team Agorafy



Our mission is to be the most accurate resource for commercial listings, residential listings, and property information, allowing users to make highly-informed decisions based on current market data.

    Do you know how the so-called “affordable” real estate in New York is getting less affordable by the day whereas the city’s luxury market is softening? #luxury #condo
    One of the most iconic buildings in Boston has officially been sold and hopefully, the iconic station will be upgraded. #Boston #SouthStation
    This week, three of the apartments in the starchitect-designed West Chelsea condo have hit the rental market. #zahahadid #chelsea
Property Listings: Big data vs. The Right data
These days there is no shortage of articles discussing “big data” or “data analytics” as the exponential growth of available information on demographics and consumer…
Property listings: Big data vs. the right data
These days there is no shortage of articles discussing “big data” or “data analytics” as the exponential growth of available information on demographics and consumer…
Just One Click Away: Digital And Mobile Technologies
Web and mobile capabilities are linking real estate professionals, their clients, and properties like never before. The property search process has been re-imagined and real…
New technology will change the real estate industry forever
Wearable devices are trending in technological advancements and are changing the way people share and retrieve information. Recent releases like Samsung’s Galaxy Gear and Google’s…
Greenland USA Develops Residential And Commercial Properties That Exemplify Modern Living
New York City is experiencing an alarming affordability crisis. For low, moderate, and middle income New Yorkers housing has become a serious challenge, all around…
Five Reasons Why All Entrepreneurs Must Keep Their Eyes On China
It is hard to overestimate the importance of Chinese influence on the modern global economy. Carving out a place in Chinese market and winning over…
‘The Back Country Hut Company’ introduces a $45,000 flat pack ‘surf shacks’ for nature lovers
Buying your dream house is always a major process. Even if you try to do your best to go through this journey, there are always…
Fall 2017 New Developments In New York City – Part II
Fall 2017 in New York City means new developments and new housing opportunities. New York City is hosting more than 40 new developments, according to…