Property developers in China take first steps abroad

Chinese developers are starting to venture overseas, chasing wealthy locals who are buying apartments from New York to Sydney as the government restrains the property market at home.

In September Xinyuan Real Estate took control of a lot slated for more than 200 units of housing near New York's Brooklyn waterfront for US$54.2 million, a deal the Beijing-based company said was the first of its kind by a Chinese firm in the United States.

Country Garden Holdings, the developer controlled by China's richest woman, said this week it would buy waterfront land in Malaysia.

China Vanke, the country's biggest builder, set up international units to expand overseas after it acquired a Hong Kong developer in May. Shanghai Greenland Group is spending 8 billion yuan (HK$9.85 billion) on projects in Australia.

"There are Chinese people who have a lot of money and have soured on China's real estate market," said Patrick Chovanec, from Tsinghua University's School of Economics and Management in Beijing.

"[Developers realise] the return on investment going forward is not necessarily going to be the same as in the boom years," he said. "They know that the game is changing and they have to change their business model to adapt and to survive."