How to find chinese investors for your real estate projects?


#1

I am real estate professional based in London…

We are interested in opening up our fund to Chinese investors, however we are curious about how we can find them…to put it simply!

There is no doubt that Chinese investors are interested in moving some money outside china to avoid over-exposure, we know they are there. We just want to know how we can attract them.


Selling Real Estate To Chinese Investors. How?
#2

I am not an expert in china, but like you I am interested in attracting Chinese investors…

Firstly, I will say - there is one main difficulty

Mobile Apps Are Off Limits
Mobile apps are central for the lives of the young Chinese. For example, almost every aspect of their lives is run through an app called WeChat. It’s like a cross between WhatsApp and a Swiss army knife. You can do almost everything on it and its impossible to live in China without it. The issue is that you cannot cannot open a business account for WeChat unless you are based in China, so you are at a loss there. The problem here is that a foreign business cannot set-up in China very easily. In fact, most of the world’s most famous tech groups have failed to set-up in China properly, so it is very extremely unlikely you will reach your Chinese investors this way…

Bypassing Apps
You could by pass the need to create an app by putting together your project and pitching to companies who already have a significant number of Chinese users / investors. I think this would be very effective, because many companies will not have the connections, or resources to put together real estate projects in unknown foreign markets. If you can pitch them the idea, they might be responsive. An example of this would be Alibaba’s Yuebao money market fund. For this project, Alibaba recruited an external fund manager and asked him to put the idea together. If you went down this route, you would need connections in China - but I strongly suspect it would pay off if it worked!

Hope In Email
There is also hope…in email. According to recent statistics by Forbes, millennials still spend enormous amounts of time emailing each other. I cannot see a reason why this would be different in China. For all our differences, our working cultures are very similar (not a huge difference between difference tech groups). If you could create an investing newsletter, or a glossy annual property guide designed for the Chinese, I think this could very effective. Remember…the Chinese are only beginning to become wealthy, so the idea of buying property (especially in the UK) is extremely glamorous and new to them. Similarly, property is an aspirational desire and a symbol of success for many of the Chinese. I could imagine young, aspirational Chinese, subscribing to the newsletter and then eventually buying into the fund- once they had the money to do so!

Overall… I think you will need to think outside the box. But if you get around these obstacles, there will be significant upside!


#3

Accessing China’s network of affluent investors is difficult as most investors are discreet about their money.

If you are enterprising, you can find them though.

One of my ideas is to attend the Beijing Luxury Property show. The event was attended by 12,000 Chinese buyers last year and held in a luxury five-star hotel. It has doubled in size in the past three years - pretty striking considering that China has considerable capital controls on buying foreign property.

The Chinese also spent $40 bn. on residential property overseas according to the Chinese property platform Juawei.com - again surprising considering the capital controls…

Property is a natural magnet for the new wealthy Chinese elite. The wealth has been built up over a long period of time, now it is emigrating to different markets. The difficulty for Chinese property investors is that property markets in hotspots like Canada, Australian and London look very frothy