Fosun buys Chase Manhattan Plaza as Chinese buyers focus on New York
Buyers from China are expanding their US property investments, seeking yield and a safe haven while the government maintains curbs on domestic purchases.
This year, a group including Zhang Xin, the billionaire co-founder of Soho China, took a stake in midtown Manhattan's General Motors Building. Greenland, a Shanghai-based, state-owned developer, agreed this month to buy a 70 per cent share of Atlantic Yards, a residential and commercial project in Brooklyn, New York.
JPMorgan Chase's deal to sell 1 Chase Manhattan Plaza to Fosun International would be the largest purchase yet of a New York building by a Chinese buyer.
"The wave continues with this purchase," said Dan Fasulo, managing director of property-research firm Real Capital Analytics. "We've seen a series of trophy transactions in key cities around the United States done by the Chinese."
Shanghai-based Fosun, run by billionaire Guo Guangchang, agreed to buy the 60-storey lower Manhattan tower for US$725 million, according to a statement filed to Hong Kong's stock exchange on Friday. The 2.2 million square foot steel skyscraper was completed in 1961. The Fosun purchase is the biggest of an entire building in New York by a Chinese buyer, according to Real Capital.
China leads all foreign countries in New York property investment this year with US$1.37 billion of acquisitions, not including Chase Manhattan Plaza, according to Real Capital. Next is Canada with US$1.19 billion.
"There's a lot of excess capital in China that needs a way out at the moment," said Simon Lo, Hong Kong-based executive director at property broker Colliers International. "Also, by investing in markets like New York, they believe they can gain from the recovery of the US economy and real estate market."
Fasulo of Real Capital compared the recent Chinese acquisitions to previous spurts of buying by Australians, Germans, Middle Easterners, and most famously, the Japanese in the late 1980s. Many of these foreign investors were forced to sell when the US fell into a recession, he said, "but I don't think that's going to be the case" with the Chase Manhattan Plaza deal.