China Overseas launches apartment project in New Jersey with focus on US buyers
Analysts say strong demand in the area close to central New York as well as Beijing’s restrictions on overseas property buying may be behind the developer’s marketing choice
China Overseas Holdings has released its first US luxury residential development in New Jersey, targeting primarily US buyers who may be drawn by its proximity to Manhattan and New York’s financial district.
The waterfront 79-storey luxury condominium, named 99 Hudson and in the Paulus Hook neighbourhood of Jersey City, will be the tallest building in New Jersey. Prices at the 781-unit development start at US$800,000 for one-bedroom units, while two-bedroom flats cost US$1.5 million. Details of unit sizes and prices per square foot were not available.
“We selected Jersey City based on its developing reputation as a centre for arts and culture, its proximity to some of the largest financial institutions in the world such as Goldman Sachs and Bank of America Merrill Lynch, and its potential for long-term economic growth,” said Cindy Xu, chairwoman of China Overseas America, the US division of China Overseas Holdings, in a media release.
While the project will also be marketed to Chinese and Hong Kong buyers, the focus on local US buyers primarily marks a shift in emphasis for a Chinese developer.
Dalian Wanda Group, for example, primarily targeted buyers in Hong Kong as one of three markets for a residential and hotel development in Australia called Wanda One Sydney. The now stalled Forest City project in Malaysia, by developer Country Garden, was targeted at Chinese buyers.
Mandy Wong, head of international properties at JLL in Hong Kong, said one reason for the focus on local buyers was the growing population in New Jersey, from where there is easy access to Manhattan Midtown and Wall Street, and which can offer greater affordability and larger living spaces.
“The rental market (in New Jersey) is very active and hence suitable for investors looking at a reasonable yield,” she said.
“Also for its easy accessibility to Manhattan, where a few highly regarded educational institutions are located, parents are looking into buying properties in New Jersey for their children’s accommodation.”
Other analysts noted that the Chinese government’s recent crackdown on overseas investment in the face of accelerating capital outflows may be behind the changed marketing focus.
In August, China’s cabinet, the State Council, ruled that Chinese investors would need special approval from Beijing to put their money into overseas property. It also halted foreign real estate deals by state firms involving more than US$1 billion.
“The difference in marketing strategy may be due to reduced buying demand in properties of high value under Beijing’s capital restrictions, said Vincent Cheung, deputy managing director of valuation and advisory services in Asia at Colliers International.
The 99 Hudson development is priced above others in the same area. Flats at the neighbouring Park and Shore project start at US$695,000 for one-bedroom units of 713 sq ft, while two-bedroom ones sell at US$1.095 million. Another new project nearby, 77 Hudson, starts at US$460,000 for a unit of 560 sq ft, or about US$820 per square foot.
The median value of a home in New Jersey is US$307,500, according to US property agency Zillow.