The year 2015 could be the lucky charm for the Chinese, especially after it was proclaimed as the "year of the Chinese investors" as per reports in The Real Deal. But, looks like their lucky potion has already expired as many developers think 2016 might not favor them.
Despite succeeding in their commercial real estate investment in New York the past two years, Chinese investors' recent real estate deal with NY seems to be on the rocks.
During the 2016 real estate outlook conference on Jan. 20, CEO of the Related Companies, Jeff Blau said that they should be looking for other sources of capital over the next few years. He highlighted at the conference the recent anxiety of the NY's real estate industry at the start of this year. He also brought up Chinese investors' absence during last week's bidding to recapitalize the first Hudson Yards tower.
The Real Deal reports say that Blau's firm was able to raise a huge amount of money from Chinese investors. However, there were only 10 bids for the said tower from all over the world in the bidding last week and there was no Chinese, according to Blau.
It was also noticed that there was a little less Chinese activities at the last quarter of 2015 than during the first quarter of the year, as per assessment of the head of the U.S. real estate investments for Abu Dhabi Investment Authority, Tom Arnold.
China has been experiencing stock market turmoil, volatility in their exchange rate, and a bad economic data over the past months. A report from the Economist even dubbed their plight as "China's market mess."
The recent economy status of China could have raised questions about the real economic health of the country, making the NY real estate industry fear that there will be fewer Chinese investors lining up to invest in the city.
Despite the possible backing off of the Chinese real estate investments for the NY property market, CBRE broker Darcy Stacom was still among the optimists who would like to address the current issue.
"I think we have plenty of people who can fill that void. I don't really worry about it," Stacom said and added that he is still hopeful on the interest-generating pension fund of Canada and Middle East in the NY market.
Meanwhile, Chinese institutional investors are also optimistic on China's economy. Besides, Chinese investment abroad could also hit, Blau bullishly added.
