With real estate prices in the US souring, Chinese investors are marching to the heart of Manhattan.
HNA Property Holdings, the real estate arm of China's HNA Group, in June paid US$265 million for a prime office building in Manhattan. The group itself - parent of Hainan Airlines and Hong Kong Airlines, with additional investments in shipping and real estate - has declared its intention to buy more property in the US and Europe using a 40 billion yuan (HK$49 billion) line of credit.
Other Chinese companies are scouring New York and other major US cities, where commercial property prices have dropped about 40 per cent during the financial downturn. Among the suitors are Soufun Holdings, which operates the mainland's largest property website, and China Investment Corp (CIC), the country's sovereign wealth fund, which manages US$300 billion.
'No doubt Chinese investors are set to become the biggest buyers in US commercial properties this year, up from second place last year,' said Allen Wu, managing partner of law firm Wu & Kao in New York, which is representing HNA in its acquisitions.
Unlike energy and telecommunication companies, which are often deemed strategic assets that carry national security concerns, the US real estate market is open to most foreign investors. So far, foreign investment in US property have not stirred widespread objections from politicians or the industry.
In fact, HNA, which owns China's fourth-largest airline, has been embraced as something of a 'white knight' after it saved the owner of a prime office building at 1180 Sixth Avenue in Manhattan from bank foreclosure.