China’s outward investment – The second wave
What to make of Chinese firms’ latest foreign purchases
Has China arrived at its Rockefeller Centre moment? In the late 1980s as Japan’s miracle economy was soaring, the Mitsubishi Estate Company bought the Rockefeller Centre in Manhattan, a landmark complex built by the eponymous oil and banking clan. Alas, Mitsubishi had to sell, at a big loss, after Japan’s asset bubble popped. Now it is Chinese firms that are seeking such trophies in New York.
Fosun International, a Chinese conglomerate, has just agreed to pay $725m for 1 Chase Manhattan Plaza, a skyscraper near Wall Street, commissioned by David Rockefeller and completed in 1961. This follows a recent investment by Greenland, a Chinese state-owned firm, in Atlantic Yards, a big development in Brooklyn. Earlier this year a consortium involving Zhang Xin, a founder of Soho China, a private property giant, bought a stake in the General Motors Building in Manhattan.
It does not necessarily follow that this assault on New York will also end in tears. Whereas Mitsubishi overpaid, the Chinese investors seem to be negotiating reasonable deals. Michael Cohen of Colliers International, a property-services firm, says that although Fosun must modernise the ageing Chase tower, “The price per square foot appears to be a bargain.”
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