Abstract
Being the second largest economy in the world, China is a complicated assemblage of many different sub-markets. For investors, it is essential to be on-the-ground in China or have a team with similar capacity in order to fully comprehend the investment opportunities and be successful. This chapter highlights insights and observations by a private equity real estate fund management team in its 20 plus years of on-the-ground real estate investing experience. Some of these experiences include revitalizing neighborhoods and not just focusing on buildings, forming an in-house team from the ground up, and nimbly and creatively bringing together best practices from both west and east to make it work. These observations are informed by actual investment projects, three of which are presented as case studies. Based on experience and observations, seven “immutable” principles are suggested, from a practitioner’s perspective, for succeeding in China’s real estate industry.
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Notes
- 1.
China’s “New Normal” is a political and economic concept espoused by the Chinese leadership to describe expectations of 7% annual GDP growth for the foreseeable future and the need for a new model of economic growth that places less emphasis on investment-led growth and focuses more on consumption, especially domestic consumption.
- 2.
National Bureau of Statistics of China.
- 3.
Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group, is a Taiwanese multinational electronics contract manufacturing company headquartered in New Taipei City, Taiwan. Foxconn is the world’s largest contract electronics manufacturer and the third-largest information technology company by revenue. They are the main manufacturer of Apple.
- 4.
China Real Estate Investment Handbook, Deloitte, June 2013.
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Gaw, C. (2021). Real Estate Private Equity Investing in China: From a Practitioner’s Perspective. In: Wang, B., Just, T. (eds) Understanding China’s Real Estate Markets. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-030-49032-4_16
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