Chinese builder moves into US housing market
The project will begin with two new developments in the Los Angeles area and another in New York. It is thought that this might be the start of a trend for Chinese investment into the US property market.
Landsea is responsible for building of around 12,000 properties each year in China, Hong Kong and Germany. It is thought that the company is moving into the US market as the property market has changed in China, with the cost of building rising and the cost of property dropping. Landsea has a US subsidiary and its managing director, John Ho, spoke about the plans at an event in Los Angeles, confirming that this was seen as “an opportunity to diversify”.
The company will begin with a project of 187 units located in Simi Valley, a development close to San Francisco, and the creation of a condo building close to Manhattan. The base for the US operations will be in Pasadena, and local contractors and materials will be used for each build. This is one of the first times that Chinese developers will be entering the US property market.
Some Chinese investors have already chosen to put their money into existing US real estate, however, and a recent report suggests that around $600m has been used by the Chinese to purchase US property in the second quarter of this year alone, with much of this investment in commercial properties rather than residential.
Landsea is not planning to target its new properties at Chinese buyers but to US customers who are planning a move to San Francisco or New York; however, it is thought that some Chinese buyers may be interested, as they will recognize the company name. The company has undertaken research that suggests Chinese buyers are not interested in creating Chinese communities.
Bill Allen, president of the Los Angeles County Economic Development Corp, has suggested that Landsea is following in the footsteps of other large companies that are choosing to base their operations in Southern California. It is now estimated that there are more than 250 companies with a presence in LA and the surrounding areas, and this is a trend that is expected to continue over the next few years.
It took Landsea around a year to find the Simi Valley site and begin creating its new Los Angeles homes. Allen has also revealed that there are many other Chinese property developers looking for suitable sites in California, particularly in the Los Angeles area.
Landsea has revealed that it is looking for other sites for new homes in areas such as Boston and Washington and that there are plans to look again at Los Angeles, New York and San Francisco. Ho has confirmed that the company believes that the US housing market is strong and that Landsea will continue to expand for as long as this is the case.
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