Florida's key position attracts investors
Seen as the gateway to Latin America, the US state is also drawing keen interest from Hong Kong and the mainland as property prices slump
Florida's strategic position as a gateway to Latin America is one of the factors attracting mainland Chinese and Hong Kong investors to buy real estate in the southeastern US state.
"Investors from around the world, including China, consider Miami's relationship with Latin America as a significant catalyst for growth. This, combined with the fact that property prices are 40 per cent below their peak, is the main reason why investors are buying property in Florida," said Charlie Rosier, a director of Blackfish, a consultancy which helps Asian clients invest in US property.
Rosier said Florida was a gateway to Latin America in the same way as Hong Kong was for mainland China. "As such, it is the third-largest wealth management centre in the world after New York and London."
Chinese investment in Miami, Florida's biggest city, accounted for 3.7 per cent of the city's property sales, he said.
This was the same as Brazil in 2010, which more than doubled its property investment in Florida in 2011, he said.
"We expect similar increase from Chinese investment in 2014 and 2015," Rosier said.
"Miami has been described as the Hong Kong of Latin America. South Florida has a huge advantage for Chinese businesses looking to locate their headquarters for Latin America," said Gray Swoope, the chief executive of Enterprise Florida, the state's economic development organisation.
There were more than 1,000 corporate headquarters and logistics facilities serving Latin America in south Florida, including Miami, said Manuel Mencia, a senior vice-president of Enterprise Florida.
Florida handled 40 per cent of US trade with Latin America and the Caribbean, said Bill Johnson, a director of Miami Port, in a report by Blackfish.
Miami had more flights to Latin America than all the other US cities combined, Swoope said.
Florida has 15 deepwater ports, while Miami airport is the largest international airfreight hub in the US.
"It's natural for us to trade with China," said Swoope, who is also the state's commerce secretary.
China is the third-largest trading partner of Florida, after Brazil and Colombia. Last year, China's trade with Florida grew 7.9 per cent to US$9.65 billion, close to Colombia's US$9.95 billion but far behind Brazil's US$20.5 billion, according to official US data.
China was Florida's largest import source, accounting for most of the trade worth US$9.65 billion between the two sides, Mencia said.
Florida's exports to Hong Kong surged 41 per cent to US$1.3 billion last year, making the city the top Asian destination for the US state, according to Enterprise Florida.
Swire Properties is one of the biggest developers in Florida and is constructing the tallest building in the region, the 80-storey One Brickell City Centre.
The US$1.05 billion mixed-use development in Miami has a gross floor area of 5.4 million square feet and will house office, residential, hotel, shops and entertainment facilities. The project is scheduled to be completed next year.
Fortune International Realty, property firm in Florida, has sold 25 properties in the state since November last year.
Six were sold to mainland Chinese and two to Hong Kong buyers, said Fernando De Nunez, the company's international vice-president, in the Blackfish report.
"Mainland China will be the most important market," De Nunez said.
Not all Asian investors are enjoying smooth sailing with their projects in Florida.
In 2011, Malaysian gaming company Genting paid US$400 million for an old-waterfront site and a nearby commercial complex to develop a US$3 billion hotel resort with 5,200 rooms and 8,000 slot machines.
This project was at least a year behind schedule, the Miami Herald reported in January.
Last year, Genting sued the US government in an effort to continue using foreign labour for its casino ship in Miami. In January, a US judge ruled against the request.
Genting did not reply to queries from the South China Morning Post.