Chinese Developers Reassess U.S. Projects
Some Chinese developers are lowering their profit expectations or are pulling out of their U.S. real estate projects completely as high real estate prices and rocky partnerships are forcing them to rethink their investment strategies.
According to analysts, an increasing supply of high-end New York condominiums is expected to result in losses for some Chinese developers. In addition, Chinese developers’ partnerships with U.S. developers on other projects have resulted in some unexpected legal concerns, which have caused delays in completing these projects.
“I see a danger in the real estate market in the U.S.,” John Liang, Xinyuan Real Estate’s managing director of U.S. operations, told The Wall Street Journal. “With its seven- to eight-year cycle, you get a sense now that it’s peaking.”
A project by New York developers Slate Property Group and Shenzhen-based China Vanke is currently stalled due to fierce opposition and an investigation by federal prosecutors and the state attorney general.
The U.S. real estate market has seen a large influx of Chinese capital over the past five years. Now many analysts believe that these investments may have peaked for the present moment. However, they do not think that the Chinese are likely to stop investing in U.S. real estate completely.
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