Featured News 2015 Chinese Auto Parts Maker May Be America’s Next Top Real Estate Buyer

Chinese Auto Parts Maker May Be America’s Next Top Real Estate Buyer

According to Wanxiang Group Corp., the largest auto parts manufacturer in China, it could become the largest Chinese corporate investor in U.S. real estate.

Since 2010, Wanxiang has invested in over 60 projects throughout the U.S., and it may buy more, according to Ni Pin, the president of the company's U.S. unit, which is headquartered in Elgin, Illinois.

The company's investments include shopping centers, medical buildings, student housing, warehouses, and office towers, said Pin.

According to Pin, they've done very few automobile deals in recent years, however, returns on real estate investments have been very high.

As the real estate market in China has slowed, Chinese companies have been increasing their investments abroad. Real Capital Analytics Inc. reports that Chinese companies have invested nearly $9 billion in commercial property in the United States.

That figure is almost twice the amount reported in 2013, and puts China in the #2 spot, just behind Canada for U.S. commercial real estate investments.

According to RCA, which tracks transactions that exceed $2.5 million, Wanxiang was the second-largest investor from China by the number of properties held in the United States.

Wanxiang is based in the Hangzhou, China, and its clients include Chrysler and Mazda. Ni is the son-in-law of the company's billionaire founder, Lu Guangiu. Ni said that real estate accounted for over half of the company's total investments in the United States in the past five years.

Potential Value of U.S. Real Estate

Ni says that they can invest in clean energy, auto, real estate or anything, however the key is to peg it well to the economic cycle.

He said they will invest more in real estate deals if they have the value-creation potential. Ni noted that some property types in certain areas of the U.S. are already overheated.

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