By Samuel Shen and Yimou Lee
HONG KONG/SHANGHAI Feb 27 China Vanke Co Ltd
, the country's biggest real estate developer, is
looking to extend its foreign investment drive beyond the
high-end U.S. market, as Beijing weighs new measures to cool
mainland property prices.
Chinese developers, including Xinyuan Real Estate Co
and Country Garden, are looking abroad and chasing
wealthy Chinese who are buying apartments in countries with
sizeable Chinese migrant communities such as Malaysia and
Australia, analysts say.
Earlier this month, Vanke partnered with Tishman Speyer, the
owner of New York's Rockefeller Center, to develop two high-rise
residential condominium towers in San Francisco.
"Of course we will not only have projects in San Francisco.
We will not rule out the possibility to have long-term
investment elsewhere and learn from good companies in other
countries," President Yu Liang told a media conference in Hong
Kong after Vanke reported earnings growth of more than 30
He did not specify which foreign markets Vanke was
Vanke's foray into the United States came after its
expansion into Hong Kong last year, where it acquired Hong
Kong-listed Winsor Properties Holdings Ltd. It also
opened a management office in the former British colony.
"They will go anywhere mainland Chinese want to go," said
Jinsong Du, property analyst at Credit Suisse. "Their target
customer is mainland Chinese who want to migrate overseas, or
have a home outside of the country."
Vanke, which counts Wall Street bank Morgan Stanley
as a shareholder, posted a 33 percent gain in second-half
profit, fanned by strong sales of small and medium-sized
Rising house prices, which have pushed home affordability
rates to all-time lows, have fanned speculation China will
expand a three-year campaign to cool the property market by
cracking down harder on investment or speculative purchases.
Market sources said that the decision by mid-size lender
Ping An Bank to ban its regional branches from
approving mortgages on Tuesday may signal that Beijing is set to
tighten controls on the property market.
Premier Wen Jiabao vowed this month to tackle speculation in
Analysts said that from a long-term perspective, Vanke could
benefit from Beijing's tougher real estate curbs, which would
squeeze out smaller, cash-strapped players and help accelerate
consolidation in China's fragmented market.
"The impact to market leaders such as Vanke will be
relatively limited if compared to small- to mid-cap developers,"
said Kris Li, senior analyst at SWS Research in Shanghai.
Still, tightening at home gives impetus to Vanke's forays
In another sign of Vanke's global ambition, the company is
in the process of shifting its mainland-traded,
foreign-currency-denominated B shares into Hong Kong-listed H
The migration, which is expected to be completed around
April, will likely give Vanke easier access to international
investors and strengthen its lead against smaller domestic
rivals such as Poly Real Estate and Gemdale
, analysts said.
Vanke's net income rose to 8.87 billion yuan ($1.43 billion)
during the July-December period, compared with 6.65 billion yuan
a year earlier, according to Reuters calculations based on the
company's full-year results published on Wednesday.
That beat analyst forecasts of 8.37 billion yuan.
For the full year, profit rose 30 percent to 12.6 billion
Vanke shares closed 4.6 percent higher on Wednesday before
earnings were announced, compared with a 0.9 percent gain in the
Shanghai Composite Index. The stock has gained 12
percent this year, far outpacing the broader market.