Chinese investors target hotels, wineries, mineral water in British Columbia
No longer content with parking capital in Vancouver property, wealthy mainlanders now target hotels, golf courses, wineries and berry farms
When Liu Chuang landed in Vancouver in 2013, he noticed that most of the Chinese immigrants he met were heavily invested in residential real estate and hungry to diversify.
Flipping houses did not appeal to the 39-year-old entrepreneur, who is launching a Vancouver-based technology incubator to help his Chinese-born friends invest in local start-ups.
"The Chinese I know … they've already bought quite a few houses, they really don't want to buy any more," said Liu, who was also born in China and co-founded venture capital firm Nextplay Ventures. "Now they want to invest in technology or other industries that can give a good return on investment."
Liu represents what real estate agents, lawyers and immigration consultants say is a transformative shift in where wealthy Asian individuals and families, primarily from China, place their money in British Columbia, the West Coast province.
Vancouver has been a top destination for Asian immigrants for decades. Houses and luxury condominiums in the area have been the investment of choice for both well-heeled new arrivals and China-based investors putting money abroad.
But with the Vancouver market looking pricey, many of these investors are seeking other opportunities. They range from hotels and golf courses targeting Chinese tourists to berry farms, mineral water sources and wineries that export to Asia.
"The days of parking capital in five houses in Vancouver have passed," said Richard Kurland, a local immigration lawyer.
There are threads of data that support the anecdotal evidence. Hotel sales to buyers with ties to China increased to four last year from just one in 2011, according to sales information by global hotel consulting firm HVS. And reports of rising demand for wineries and farms have coincided with a 60 per cent jump in the value of British Columbia wine exports to China from 2010 to 2013, and a doubling in the value of agricultural food exports to China in the same period.
Those servicing the new wave say Chinese investors are also looking to put down roots and build a local business for their children, with British Columbia's mild climate and clean air increasingly seen as more desirable than China's pollution-hit cities. This marks a shift from a tradition among many wealthy families who had lived in Canada just long enough to secure citizenship and put their children through school before returning to Asia.
"It has to do with the perceived political climate in China," said Alice Chen, a managing director at Sky Capital Group, which advises wealthy Chinese on acquisition opportunities. "Economic and political policies can change at any minute, which affects their businesses, so they see Canada as the more stable environment."
Among the most popular investments were wineries, which appealed to buyers looking for a lifestyle business that could be passed on to the next generation, said Christa Frosch, an agent with Sotheby's International Realty Canada. In 2009, there was just one Chinese-owned winery in British Columbia, said Frosch. But now she estimates about 10 per cent of the province's 230 licensed wineries are owned by people with ties to China.
Julie Wei, a residential agent with Macdonald Realty who now also helps clients find commercial opportunities, says the desire to buy a Canadian business is motivated in some cases by children who have spent years in Vancouver and no longer want to return to China. That is what happened to Ben Bi, who came to Canada for university and ended up staying.
Backed by his family's real estate business in China, Bi has bought a tract of land and is designing a high-end multi-home development. "They actually want to see the next generation, and even the generation after me, have a better life," he said.