The real estate business of one of the UK’s richest families has said it will take advantage of the property downturn in China to launch its first new-build residential scheme there, in Shanghai.
Grosvenor, owned by the Duke of Westminster, is looking for a site now and hopes to conclude a deal within the year, UK newspaper the Financial Times (FT) reported.
Home construction in China fell 16.4% year-on-year in the first half of 2014, according to data out last month, while total sales dropped 6%, but the company believes now is the time to strike.
"We’ve always had a very long-term idea of what we wanted to do in China. This is the obvious next step for us," Nick Loup, Grosvenor’s chief executive in Asia, told the FT. "You’re more likely to find good quality opportunities when the market’s in a down cycle."
The group is also searching for a commercial property development in the city, the FT reported.
Grosvenor has previously done renovation projects in the Chinese residential market but this would be its first new-build scheme. It comes at a time when local developers are cutting prices and scaling back investments, the FT reported.
The housing market has been hurt by very high prices in China’s main cities, and by oversupply in smaller cities, analysts say, but luxury apartments in Shanghai and Beijing seem to be resisting the slump.
Nick Loup said Grosvenor would have to make its move quickly: "We don’t expect this down cycle to continue for too long," he told the FT.