As Canada scraps its Millionaire Visa, new partnerships and initiatives are going ahead in San Francisco, USA, aimed at encouraging wealthy Chinese investors to buy homes and businesses
Following comments by overseas property agents that with the demise of Canada’s Millionaire Visa the United States might attract wealthy investors, comes news of other initiatives.
A new partnership is being formed to help boost Chinese investment in real estate in San Francisco, USA and a report says investors are already interested in coming to the areas through the EB-5 visa, which requires a minimum US$500,000 in exchange for a green card.
San Francisco real estate firm Kidder Mathews has linked up with the Tsinghua Real Estate CEO Chamber of Commerce, which includes 3,000 property sector members, to encourage commercial and residential real estate investment in the region.
And there is plenty of investment available, Henry Xu, deputy secretary general of Tsinghua Real Estate, has told the ChinaDailyUSA website, “Along with taking advantage of China’s incredible economic growth, our members have gained vast experience in real estate development and other related fields. Our members have also acquired experience and also abundant capital.”
Skip Whitney, Executive Vice-President of Kidder Mathews, says, “This will act as a bridge for Chinese business investment that wants to come to the Bay Area.
“The China real estate market is maturing and the opportunity for Chinese investors to see the same return as they have in the past is slowing down. In contrast, the US property market is stable and still has long term growth available.”
In 2012, Kidder Mathews opened its China Services Group (CSG), which is claimed to be the only China-focused cross-Pacific real estate group in the US that aims to help Chinese investors coming to the United States for business or personal reasons.
The news comes after industry experts predicted Canada’s scrapping of its ‘millionaire visa’ would open up major opportunities for other countries to attract High Net Worth Individuals, especially the United States through its EB-5 visa
Now a new economic report, the Ties That Bind 2014, from the San Francisco Bay Area Council says property in the area is a big attraction for Asians and many are also drawn by the opportunities that EB-5 brings.
“Real estate is becoming an increasingly important draw for Chinese investors, throughout the U.S. but particularly in the Bay Area. For Chinese investors, the U.S. real estate market has few barriers to entry. In China, slowing economic growth is prompting companies and investors to accelerate their globalization plans, both to access new markets and technology and to diversify risk.
“The San Francisco Bay region is a natural destination, but investors face a learning curve regarding entitlement, disclosure and other complexities in U.S. law,” it warns
Sean Randolf, President of the Bay Area Council Economic Institute, says, “That’s the big story. Chinese investors are scouting around the Bay Area as we speak.”
Chinese financial investment in the Bay Area reached US$495million in 2011 – 7% of all foreign private investment in the region, but the actual benefit could be much greater. “Most real estate investment coming out of China you don’t read about,” he says.
Dan Cashdan, senior managing director and principal of HFF LLC says Chinese investors are turning to overseas markets due to slower economic growth in their own country.
Speaking on a Deloitte Touche webinar on the expanding Chinese investment in U.S. commercial real estate, he says. “In 2013, some 18 investments totaling over $2 billion of equity were completed. Among these were large investments in Los Angeles, San Francisco and New York, including the acquisition of stable, core office buildings and investments into large-scale new developments.”
SFRC CEO and Bay Area real estate investor Tom Henderson says most of his investors—about 80%—are mainland Chinese, and the rest are from Hong Kong, Pakistan, Singapore and Vietnam. His investors are sophisticated, understand the EB-5 rules, and are adept at analyzing business proposals.
“It’s the project that drives investors. “The Chinese from China are the smartest in the world; they’re capitalists in a communist country, they have to deal with competitors on the ground while protecting themselves from the government.
The Tsinghua Real Estate CEO Chamber of Commerce was set up in November 2006, and is based on the original CEO Student Association of Tsinghua University real estate.
The national industry association is a non-profit social organisation and was established under the guidance of China Real Estate Chamber of Commerce and professional manager training centre of Tsinghua University. It aims to, “Consolidate resources, create opportunities and repay society.”
To download the full Ties that Bind 2014 report, go to: http://www.bayareaeconomy.org/media/files/pdf/TiesThatBind2014EditionWeb.pdf
By Adrian Bishop, Editor, OPP Connect
Article source: http://www.opp-connect.com/14/02/2014/san-francisco-aims-to-attract-more-chinese-investors/