Chinese Developer Invests $5Billion in Brooklyn


Greenland Group, a Chinese state-owned developer, will take a majority stake in New York’s Atlantic Yards in a deal that is expected to be the biggest Chinese investment in U.S. real estate.

Greenland will own 70 percent of a joint venture established with Forest City Ratner Companies to develop the vast commercial and residential project in Brooklyn, with the total investment likely to exceed $5 billion, according to the Chinese developer.

Over the last year, Chinese real estate companies have started breaking into the US as they look to new markets to diversify their businesses after focusing almost all of their investment on China for the past two decades.

The Atlantic Yards development, occupying 22 acres and designed to house 15 towers, will easily be the largest in size and overall investment by a Chinese developer in the US to date. It will also put Greenland at the centre of one of New York’s biggest urban renewal projects in decades, and one that has been slow to get off the ground in the wake of the global financial crisis.

“Greenland believes that the U.S. market is bullish,” said Zhang Yuliang, chairman of Greenland Group. “The U.S. economy is recovering, which brings ample liquidity to the market and a stable rate of return. The real estate development prospect is generally optimistic.”

The agreement with Forest City Ratner is a memorandum of understanding. An adviser working on the negotiations said the two companies were aiming to complete their formal joint venture by the middle of next year.

Greenland said that it would target the residential project partly at Chinese investors and immigrants as well as the “white collar” New York community.

The Atlantic Yards deal highlights Greenland’s rise as one of the most international and ambitious of China’s property companies.

In May, the Shanghai-based developer completed a backdoor listing on the Hong Kong stock exchange by acquiring control of a smaller listed company, a move that will make it easier to raise funds for its overseas push.

Outside of China, Greenland now has projects in nine cities across six countries, including South Korea and Thailand. Earlier this year it also announced a nearly $500 million investment in a residential tower in Sydney and a land acquisition for a planned $1 billion complex in Los Angeles.

Mr Zhang said Greenland was looking for foreign partners, but only up to a point. “We need to work closely with overseas companies in the fields of market research, planning and design, and legal consultations. However, Greenland would never be only a financial investor, instead it insists on being a developer and operator,” he said.

Even while expanding abroad, the bulk of Greenland’s business will remain in its home market. It has projects in 65 cities across China and is currently building a 636-metre skyscraper in Wuhan, which will be one of the country’s tallest buildings when complete.

Other major Chinese developers to enter the US over the past year include Vanke, the biggest listed Chinese property company, which is co-developing a luxury high-rise in San Francisco, and Beijing’s Xinyuan, which bought a 2-acre condominium site in New York.

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