When it comes to property investing in China Li Ka-shing and Wang Jianlin were ahead of the pack when the market moved up. Now they are heading for the exits.
Both real estate moguls made a killing in Chinese real estate in the last two decades, earning them respect among investors. So even before the recent decline in the prices of Chinese property, they have gradually withdrawn from China’s market and diversified their investments with overseas property.
Hong Kong Mogul
According to the Wall Street Journal, Hong Kong billionaire Li Ka-shing is putting the prestigious Shanghai International Capital Plaza office and retail complex up for sale for US$250 million.
This would be the fifth property asset sold off by a company controlled by Li in the last 12 months. Earlier this year, Li’s son Richard Li reportedly sold the Pacific Century Place complex in Beijing for $900 million.
Though not as rich as Li Ka-shing, Wang Jianlin, China’s richest man, made his fortune in real estate. Last year, Forbes reported his worth to be $15.1 billion. He earned his wealth primarily through developing malls and movie theatres in China.
Now Wang, the owner of conglomerate Dalian Wanda Group, is moving his money out of China. He has made another $1.2 billion investment in the United States to acquire a property in Beverly Hills.
Like Li’s decision to sell off his China assets, Wang’s focus on overseas assets may be a sign for an extended slowdown in China’s property market.
Only in July, Wang took on a $900 million hotel project in Chicago, another piece in his U.S. and European real estate puzzle.
He spent a fortune to acquire the AMC movie theatre chain in 2012 and announced last year that he planned to invest $1 billion in New York to build hotels.
Dalian Wanda Group also bought properties in Spain and England and Li Ka-shing is also interested in the Old World. Earlier this year, he started a project to develop 3,500 apartments in the London borough of Lewisham. Last year, Li’s Hutchison Whampoa Ltd. reportedly purchased assets in Europe totaling more than $4 billion.
For newly constructed residential property prices in 70 cities across China, 64 cities reported a drop in July, when in June, only 55 saw falling prices. This is the highest number since January 2011.
Price in first-tier cities fell across the board. Beijing and Shanghai declined 1.3 percent and 1.4 percent respectively from the previous month. For used apartments, prices in Wenzhou for examples dropped 10.2 percent from last year.
Liu Jianwei, a senior statistician at the National Bureau of Statistics, said in July “uncertainties over the outlook of the property market have kept potential homebuyers standing on the sidelines.”
From the Vision Times