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GENERAL PROPERTY

Shanghai giant sell sites in US5bn project in NYC

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SHANGHAI government-owned Greenland Group has offloaded three development sites within its US$5 billion New York City project Pacific Park Brooklyn, continuing the selloff of offshore assets following the Chinese government’s crackdown on overseas property investment.

The deal comes shortly after major Chinese player Dalian Wanda found a buyer for its US$1.2 billion One Beverly Hills project in Los Angeles, and a 60% stake in its Vista Tower project in Chicago, both in Canadian developer Triple Five Group, after selling out of its Gold Coast and Sydney projects for US$1.13 billion earlier this year.

The new owners of the Pacific Park Brooklyn sites are two New York family-owned firms, TF Cornerstone and Brodsky Organisation. TF Cornerstone acquired lots B12 and B13 at 615 and 595 Dean Street, and Brodsky Organisation took lot B15 at 664 Pacific Street.

In its entirety, the project would comprise 6,430 apartments, 2,250 affordable homes, and office, retail and community space across 22 acres. Initial revenue of the 22-acre mixed-use Pacific Park Brooklyn project is falling short of early expectations.

Greenland had bolstered its share of the project from 70% to 95% in January as it sought a more aggressive timetable for the development, following reported disagreements with joint venture partner Forest City.

The Pacific Park sales follows a Greenland-headed consortium divesting a San Francisco Bay area property mid-year for US$308 million, at which it harboured ambitions for a US$2 billion mixed-use project but had been unable to obtain entitlements.

Greenland was also looking for a buyer of the residential and hotel components of its $1 billion Metropolis project in Los Angeles before it found a $310 million construction loan to complete the third phase.

It had spent almost US$19 billion on overseas property in a four-year buying spree that ground to halt last year with Beijing’s announcement of tightened foreign investment controls, which has prompted a number of major players to scale down their offshore investments.

CBRE this week said the restrictions on outbound investment are still the main deterrent, with the US-imposed tariffs as part of the trade war with the two major economies having had little impact on Chinese buyers purchasing assets abroad,

“Chinese Sovereign Wealth Funds are likely to remain the most active investors in overseas real estate. There may also be some isolated cases of large Chinese firms purchasing assets abroad for self-use,” CBRE said.

Dalian Wanda began scaling back its overseas interests with the US$1.13 billion sale of its Australian projects, the Jewel One tower on the Gold Coast and One Circular Quar in Sydney, to Yuhu Group earlier this year, as well the One Nine Elms luxury hotel and residential project on the River Thames in London.

They were believed to have been shopped around as part of a US$5 billion global package that included the Gold Coast and Sydney assets, along with One Beverly Hills and Vista Tower.

Australian Property Journal