China's top buyer of US real estate may be auto-parts maker

NEW YORK (Bloomberg) - Wanxiang Group Corp., China's biggest auto-parts maker, said it may have become the largest Chinese corporate investor in U.S. real estate, betting an economic recovery will generate good returns.

The company has invested in more than 60 projects nationwide since 2010 and may buy into more, said Ni Pin, president of Wanxiang's U.S. unit. The investments include office towers, shopping centers, warehouses, homes, medical buildings and student housing, he said.

"We've done very few automobile deals in the U.S. in the past four to five years," Ni said in an interview after a Committee of 100 conference in New York on April 10. Returns on real estate investments have been "very, very, very" high, he said, declining to give the exact number.

Chinese developers in recent years have increased investment abroad as the market at home slowed. Chinese companies invested US$5.95 billion in commercial property in the U.S., according to Real Capital Analytics Inc. That was almost double the amount in 2013, placing China second only to Canada in terms of U.S. commercial real estate investments.

Wanxiang was the second-biggest Chinese investor by the number of properties held in the U.S., according to RCA, which tracks transactions of more than US$2.5 million.

Wanxiang, based in the eastern Chinese city of Hangzhou, is known for its acquisition of Fisker Automotive Holdings Inc., the defunct U.S. maker of luxury plug-in cars. Wanxiang's clients include Mazda and Chrysler. Ni is the son-in-law of the closely held company's billionaire founder Lu Guanqiu.

Real estate accounted for more than half of Wanxiang's total investments in the U.S. in the past five years, Ni said.

"We can invest in clean energy, auto, real estate or anything, but the key is pegging it well to the economic cycle," Ni said. "We will invest more in real estate deals if they have value-creation potential, but some property types in some U.S. areas are already overheated."

Commercial real estate prices in the U.S. are 6.9 per cent above their 2007 peak, according to Moody's Investors Service. The median price of an existing single-family home rose from a year earlier in 86 per cent of 175 metropolitan areas measured, the National Association of Realtors said in February.