China Vanke Co Ltd, China’s largest real estate developer, has teamed up with US real estate firm Tishman Speyer Properties to develop two residential towers in San Francisco.
It is the Chinese heavyweight’s first venture into the US market.
The project will cost about $620m, with China Vanke contributing $175m and Tishman Speyer $75m, a source familiar with the deal told Reuters. Debt financing will cover the rest of the cost.
China Vanke will have a 70% stake in the joint venture and Tishman 30%, Reuters reported.
Two residential towers planned for San Francisco (Credit: Tishman Speyer Properties)
The project at 201 Folsom Street will consist of two connected residential towers, one 37 stories and the other 42 stories high, and have a total of 655 residences.
"After 30 years of development, our go-global strategy is ready to be implemented," Tan Huajie, Vanke’s board secretary, told the China Daily. "And access to an open international capital market is necessary for such a strategy," he added.
"It is just the beginning of Chinese property developers going global," Qin Xiaomei, director of strategic consulting for Jones Lang LaSalle in Beijing, told China Daily.
Shenzhen-based Vanke joined with New World Development Co last month to buy a residential site in Hong Kong for HK$3.4bn ($439m), its first project outside the Chinese mainland.
But Vanke President Yu Liang said the focus of the company’s business in the coming decade will remain on the mainland.