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Overseas realty investments by Chinese firms will double in 2014
Brief:Growing numbers of Chinese realty firms are foraying into overseas markets.International realty consulting firms, such as Colliers and Jones Lang LaSalle, predict that China's overseas realty investments will double the 2013 level in 2014, although most of the projects are still at their preliminary stages.
Dalian Wanda Group chairperson Wang Jianlin
Dalian Wanda Group chairperson Wang Jianlin. (File photo/CNS)

Growing numbers of Chinese realty firms are foraying into overseas markets but experts warn they will encounter multiple challenges, in the fields of politics, exchange rates, and talent, for their initiatives.

Many of the overseas ventures are worth billions of yuan. Total overseas investments by Chinese realty firms have already approached 100 billion yuan (US$16 billion) in the first three months this year, higher than the 2013 total, with the outbound bandwagon accommodating not only realty giants, such as Vanke, Wanda, Greenland, and Country Garden, but also many small and medium-scale enterprises. They have set their eyes on the UK, Australia, and the US in particular.

International realty consulting firms, such as Colliers and Jones Lang LaSalle, predict that China's overseas realty investments will double the 2013 level in 2014, although most of the projects are still at their preliminary stages.

According to a Jones Lang LaSalle report released recently, Chinese realty firms invested over US$10 billion abroad in 2013, up 30%, including US$7.6 billion for commercial properties.

Wanda is spearheading the overseas initiative. In January, when attending the World Economic Forum in Switzerland, Wang Jianlin, Wanda chairperson, announced a plan to invest £2-3 billion (US$3.4-5.1 billion) in urban renewal projects in London, boosting its total overseas investments to near 50 billion yuan (US$8 billion), which will be followed by investments in eight to 10 major cities worldwide in the next 10 years.

Already with a presence in 15 cities in 11 countries, Greenland will invest over US$20 billion abroad this year and the figure may double in 2015.

Major Chinese realty firms expect to derive an increasing share of revenue from the overseas markets. Zhang Liangyu, chairperson of Greenland, is confident that the company's overseas sales will reach 20 billion yuan (US$3.2 billion) this year, a far cry from 2013's 3 billion yuan (US$481 million). Mo Bin, president of Country Garden, predicted the overseas markets will contribute one third of the company's total sales in five years, while Wang Jianlin also estimated overseas sales at one third, or US$30 billion, of its total revenue by 2020.

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