Making the experience count

Another interesting development in the international activity of Chinese realty companies is the fact that besides commercial property developers, there are also scores of residential property companies setting up ventures or projects.

In June this year, China Vanke said it intends to establish a business division in Hong Kong to oversee its overseas markets. The company president Yu Liang has indicated that markets in developed countries like the US are its primary investment target.

Another factor propelling the move outward is the stringent regulations that govern the domestic property market. Though the regulations have been formulated to prevent a bubble, industry sources feel they leave little maneuverability for companies to spread risk. The sources say Chinese companies are looking to minimize risks by investing in other countries, much like "not putting all the eggs in one basket".

"Chinese companies would love to look at how their capital can grow faster and how to provide better returns. That's why I think there will be a continuing demand for going overseas," says Alan Liu, managing director for North Asia at Colliers International, a leading global real estate consultancy.

Most of the Chinese companies are flush with funds, says Liu. At the same time, many cash-strapped foreign nations are opening up their real estate markets to attract more external investment.

"Chinese developers can get preferential deals due to the depressed markets in the US and Europe. They are in a good bargaining position," Liu says.

Giving further credence to Liu's contention is the recent investment deal inked by Beijing Capital Land in France. The Chinese property company, listed in Hong Kong, plans to build an economic and trade cooperation zone in France, to take advantage of the preferential policies of France and Europe.

"Influenced by the European debt crisis, the French government is looking to get more Chinese companies to invest in France to boost the local economy and create more jobs," says Liu Xiaoguang, president and CEO of Beijing Capital Land.