Chinese developer Xinyuan to launch fourth US project in Manhattan
Venturing alone is a steep learning curve on a bumpy road, Chinese property firms tells why its strategy is worthwhile
New York-listed Chinese developer Xinyuan Real Estate will build its fourth project in the United States in Manhattan.
It also plans to raise a fund for investment at a time when the Chinese housing market is struggling to shake off a burdensome glut.
Its third US project, launched for sale last year, fetched the highest price ever in the trendy Williamsburg neighbourhood of Brooklyn in New York, as a penthouse was recently sold for US$6.5 million.
Five remaining penthouses in the 216-unit Oosten project had yet to be sold, with one priced at US$8 million, said the company's chief financial officer, George Liu Huaiyu.
Xinyuan, founded by Zhang Yong in Zhengzhou, Henan province, bought the land parcel for US$54.2 million in 2012, following successful projects in Nevada and California. It is among the first group of Chinese developers to venture abroad.
Liu told the the internal rate of return would fall from about 70 per cent for the Brooklyn development to above 30 per cent for the Manhattan project, which the company plans to officially launch for sale about 100 units in the second half of next year or early 2017.
"If you start to invest in the US now, there are some concerns about the [condominium] market in Manhattan," he said. "But the [internal rate of return] is still much better than that in China."
