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Diversification for China Overseas Land

Published on January 10th, 2014

Further diversification for China Overseas Land, as it plans to bid for more sites at Kai Tak, the site of Hong Kong’s old airport in Kowloon, as detailed here

It is notable that COL is planning to doubly diversify, seeking to increase the commercial part of its development portfolio to 20% in five years, from 5% now, as well as investing overseas. This is part of a wider pattern of China’s largest developers moving a portion of their business out of the domestic housing market that gave birth to them.

For example Greenland Group has signed deals for two billion dollar developments in London already this year.

The key question is whether these moves are a part of a natural progression as China’s major companies grow and go global, or whether they are simply a hedge against a collapse of the Mainland housing market.

For example, Singapore developers are also cropping up all over the world and this is a direct consequence of their homeland’s moribund housing market. There are no margins at home, so the developers are taking their capital and expertise overseas.

The other key question, which was put to me recently, is: “Are Chinese developers the new Japanese?” Thoughts please…

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