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From left: 666 Fifth Avenue, 1221 Sixth Avenue, 245 Park Avenue and Ludwig Chang
Should Chinese institutional investors eyeing trophy New York properties think twice? One major Chinese executive thinks they will.
Ludwig Chang, the recently retired co-founder of COAMC International, a subsidiary of leading state-owned asset management firm China Orient Asset Management, said the Chinese government is taking a skeptical look at moves to buy major real estate assets in the U.S. – and that clampdown may have already caused some casualties.
Speaking on a panel at the China Institute on Rector Street Wednesday night, Chang appeared to reference Anbang Insurance Group’s abandoned plans to invest in Kushner Companies’ redevelopment of 666 Fifth Avenue.
“Some insurance companies, who shall remain unnamed, have had two or three failed transactions,” he said. “One Was A Building On Fifth Avenue that was quite well known. I think those are the handiwork of the new insurance regulatory regime.”
Chang said the negative attention on trophy deals will likely curtail such transactions in the short-term.
“There are some high-profile buyers that have met restrictions in purchasing in the U.S.,” he said. “Speaking from experience and from what I hear, some of these more trophy high-profile deals have received negative reaction from the government. Some of the high-profile transactions are going to slow down a little bit. Long-term investment will be more rational and more return-based.
The China Insurance Regulatory Commission, a Chinese government agency, has been clamping down on the insurance industry in particular in recent months, with Chinese companies facing stricter reporting requirements when they want to convert yuan into foreign currency. The country as a whole has been getting tougher on capital flight to combat a weakening currency.
Among the recent trophy deals in Manhattan, Chinese conglomerate HNA Group is in contract to acquire 245 Park Avenue for $2.21 billion, as The Real Deal first reported. And China Investment Corporation, a Chinese sovereign wealth fund, bought a 45 percent stake in 1221 Sixth Avenue in a $1.03 billion deal.
Chang was careful not to mention name上海贵族宝贝