“[Chinese buyers] have access to huge amounts of capital that’s been built up over many years. And they are able to deploy the capital quite quickly around the world.”
At the Shenzhen Real Estate Expo, marketing brochures included computer-generated images of faraway places with clear blue skies, perfectly manicured lawns, white sand beaches and alluring tourist attractions.
Many markets welcome Chinese buyers with investment visas, which grant residency in exchange for capital. These are intended to create jobs and often go toward real estate projects. Over the last decade, more than 400.000 Chinese invested the $500,000 to take advantage of the U.S. program.
Astute developers and agents are providing more Chinese-language material and Mandarin-speaking representatives. Some partner locally. Berkshire Hathaway recently joined forces with Juwai, China’s largest international property portal.
Targeting Chinese prospects “is a no-brainer,” Fisher said. “They’ve shown that they have the numbers and the cash to influence markets.”
Beyond language, there are differences between buyers from China and other countries. Chinese corporations use greater equity initially before subsequently putting on debt.
“It’s about securing the building first and then thinking about how to boost the returns,” Green-Morgan said. In contrast, investors from other markets focus more on maintaining specific debt-equity ratios.
Chinese institutions also do more land-developmental deals, which Green-Morgan said is unique. Although some Chinese are searching for headline-generating trophy properties, “most of them are very disciplined in the way they underwrite the deals,” Green-Morgan said.
Retail buyers are generally 100 percent cash buyers. According to Fisher, addresses with “8’s,” an auspicious number, and environments with feng shui have appeal, but these are ancillary considerations. To decrease maintenance and increase tenant interest, they want new properties.