US property firm Tishman Speyer takes Chinese partners offshore

Almost a decade's careful cultivation of relationships in China is giving United States property firm Tishman Speyer access to billions of dollars of financing as China Inc begins diversifying its portfolios abroad through acquisitions.

Last month, the country's two biggest insurers - China Life Insurance and Ping An Insurance (Group) - became the major partners of a joint-venture redevelopment project in Boston, where Tishman Speyer is taking the lead to build a 13-storey office compound and a nine-storey 100-unit condominium tower with completion scheduled in 2018.

"We will certainly consider further cooperation with them," said Tishman Speyer senior managing director and China country head Ryan Botjer. "This is the beginning of a process of significant Chinese capital going offshore."

The Boston project marked the two Chinese insurers' first foray into the US real estate market, but not Tishman Speyer's first tie-up with Chinese companies.

The US firm entered China in 2006 and has developed more than four million sq ft of space, with a further 20 million sq ft in the development pipeline.

Tishman Speyer sold a grade A office tower in its second mixed-use project in Chengdu to Ping An in 2012.

"We've known the senior management in the organisation for a while," Botjer said. "I think the Boston investment is an extension of that relationship offshore. It is a relationship that we hope to continue to grow."

Insurers have been a major driving force in China's investment in real estate overseas since regulatory liberalisation in 2012. So far this year, they have invested more than US$2.5 billion in property, more than they have bought in all the previous years combined, according to Real Capital Analytics.

Apart from insurers, developers and wealthy families were also among the active buyers of overseas real estate assets.

Tishman Speyer teamed up with China Vanke in a 655-unit condominium development overlooking San Francisco Bay, which broke ground in 2013.

"The project is exceeding our expectations, and the cooperation has been very smooth," Botjer said. "If there is an opportunity in the future that meets the criteria of both firms, we would certainly consider working together again."

Chinese firms' overseas expansion, with some backed by the government, brings not only capital but also major tenants for Tishman Speyer, as it manages assets in Europe, Brazil and India.

For instance, China State Grid Corp acquired a building developed by Tishman Speyer in Rio De Janeiro as its headquarters in Brazil.

China Central Television and China Eastern Airlines Corp are the company's tenants in the US.

"We believe more and more Chinese companies will expand their business offshore. We look forward to supporting their growth by providing real estate solutions which meet their needs," Botjer said.

In C-Suite, Ryan Botjer shares Tishman Speyer's China expansion strategy.