Chinese Investors Hungry For Canadian Trophy Assets
A rising wave of Chinese investors sees Canada as a safe place to stash cash. “We’ve had a number of groups say, 'We have $500M, we’re coming to Toronto, and we want the biggest sites in the city,'” Colliers' Adam Kosoy tells us.
China has eased restrictions on investing outside the Mainland, explains Adam, a senior managing director with Colliers International (he's pictured, left, at last year’s Real Estate Industry Hold’em for Life Charity Challenge with Van Dyk Natural Stone Supplies' Seth Rudin and Laurier Group’s Steve Sliverberg.) Global outflow of Chinese capital reached a record $18.3B in 2014, and Adam says Toronto's an especially hot destination for it.
Shanghai-based Greenland Holding Group Co made a big splash last fall when it purchased the King Blue condo development site at King Street and Blue Jays Way from Gupta Group and Remington Group. (A Fortune 500 firm, Greenland made six other international acquisitions in 2014.) Adam's team advised on the original deal that sold the site to Gupta for $72M (the project rendering is pictured). Only a few years later, he notes, Greenland bought it for $110M—“a nice little lift.”
In January, Shenzen-based Brilliant Circle Group Investments bought a 230-acre site from Imperial Oil in Port Moody and Anmore, B.C., and hired renowned local architect James Cheng (who designed the Vancouver Shangri-La, seen here) to craft a vision for a mixed-use urban village. And last December Evergrande Group, out of Guangzhou, acquired Fairmont Le Chateau Montebello resort (seen below) plus 700 acres of development lands. The three deals “signify a new era of opportunity for Canadian property owners,” notes Colliers.
Unfortunately for hungry Chinese investors with hundreds of millions to spend, Canada’s a “very tight” market with a lack of big trophy assets, Adam points out. “There’s just not enough product to go around." Total Chinese investment in Canada in 2014 was $142M, and Colliers predicts that will increase this year. Most deals to date have been land development-oriented, but Adam says Chinese bidders are looking to diversify into Class-A office projects and super high-end homes in TO’s toniest locales. “They’re emerging and they’re sniffing around.”