Potential buyers look at house models at a Vanke property center in Jilin. (Photo/Xinhua)
Property developer China Vanke has made further progress in its plan for overseas expansion after becoming a part of a residential project in San Francisco — its first in the United States, the Chinese-language First Financial Daily reports.
Vanke recently signed a deal with its American counterpart Tishman Speyer Properties to build a project on 201 Folsom Street in San Francisco, but very few details about the partnership have been revealed, the newspaper said.
Tishman Speyer is the largest commercial property developer in the United States, owning real estate that has a combined value of US$54.2 billion and running 325 projects around the world.
The American deal, along with Vanke's recently formed partnership with New World Development in Hong Kong, has led to speculation that the Chinese company plans to move into the commercial property sector through overseas expansion.
Vanke's Hong Kong unit and New World won the bid for a rail station property project in Hong Kong on Jan. 23, marking the mainland company's first foray into the territory, the newspaper noted.
A source within Vanke rebutted the speculations and told the newspaper that both the Hong Kong and San Francisco projects are for residential development and the company hopes to improve its property management abilities through these overseas deals.
Vanke president Yu Liang told the press on Jan. 21 that it was time for the company to put its internationalization strategies on the agenda as it enters a fourth 10-year development cycle next year.
"During Vanke's fourth decade, we will evaluate ourselves from the aspect of the world, and see if Vanke's management and corporate governance meets international standards," Yu said.
Therefore, the newspaper said Vanke invests in these two overseas projects to acquire the necessary experience.
But with Yu having said earlier that Vanke was still exploring the possibility of becoming an international player, the newspaper said the company is unlikely to shift its main business focus to the global markets.
The newspaper noted that during a press conference last year, Yu had said the company did not have a clear strategy for its globalization and would not enter a new market without a local partner.
The source within the company also told the newspaper that like the Hong Kong deal and the San Francisco project were likely to be overseen mainly by the local partner.