China's Wanda Group, which owns AMC Theaters, is spending $1 billion to build a five-star hotel in New York City, becoming a new addition to the recent Chinese investment wave in the Big Apple's real-estate market.
Wang Jianlin, chairman of the Dalian -based commercial real estate developer, told Reu ters in Beijing that the company is in talks with potential partners to build a Wanda hotel and an adjacent apartment building in New York.
The chairman said the project will probably be announced in the third quarter of this year "if everything goes smoothly".
The announcement comes a day after it revealed it will launch a 1 billion pound ($1.55 billion) investment for the overall control of the United Kingdom-based luxury yacht manufacturer Sunseeker and the construction of a five-star hotel in the center of London.
Wanda made headlines last year when it acquired the United States-based cinema chain AMC for $2.6 billion - including debt - making it the largest Chinese entertainment expansion in the US and the largest cinema owner in the world.
The Wanda group already runs a chain of five-star hotels and has partnered with other hotel groups. The move to build a five-star hotel in New York furthers Wanda's overseas expansion into the US since the AMC acquisition .
"Many people have been really bullish on hotels, and the hotel market has been very strong in New York," said David Von Spreckelsen, a division president with US luxury home-builder Toll Brothers City Living in New York.
"It will continue to be a place within the US that is desirable and on a world level. Obviously it competes with every major city in the world."
Fred Lipman, a partner at Blank Rome LLP and the author of International Strategic Alliances: Joint Ventures Between Asian and US Companies, said the prices in the real estate market are a major attraction for Chinese investors.
"The general perception is this is a good place to invest for real estate at this point based on the current pricing levels," said Lipman.
Wanda's move into New York is the latest move by Chinese investors in one of the world's most desired cities.
Data from the National Association of Realtors show that Chinese mainland and Hong Kong buyers are the second-largest investor group, after Canadians, in the US housing market, contributing some $9 billion in the March 2011 to March 2012 period.
Earlier this month, Zhang Xin, CEO of Soho China , a Beijing-based real estate developer, together with other investors, bought a 40 percent stake of New York's iconic General Motors building in midtown Manhattan for $1.4 billion.
New York has long been a hotspot for foreign real estate investors.
In the 1970s, the Japanese made heavy investments in the city's real estate. "There have also been a lot of Europe ans investing here over the last couple of years, and now I see the Chinese just being the next wave," said Spreckelsen.
Spreckelsen cautions foreign investors - including the Chinese - to have sufficient local knowledge before tapping into what he calls a "local game".
