Brookfield Making Moves in China

Brookfield Asset Management, the Toronto-based global asset manager with landmark properties including Brookfield Place in Manhattan and Bank of America Plaza in Los Angeles, has plans to aggressively expand its portfolio of commercial space in China. According to a Wall Street Journal report, last month Brookfield bought nearly 22% interest in a unit of Hong Kong-listed property developer Shui On, which built the popular Xintiandi commercial complex in Shanghai.

Bruce Flatt, Brookfield Chief Executive Officer, has said that after spending recent years investing in distressed developed economies, the firm is bullish on China's office sector and focused on the long term, with the firm's new venture looking to tap into Shui On's local insights and ultimately yield at least 15% on equity.

According to real-estate consultancy CBRE, the office markets in tier-two Chinese cities—large cities that nonetheless lack the stature of leading Chinese cities such as Beijing and Guangzhou—are often more risky and at an early, uncertain stage of development. China's property market generally has a two-tiered structure in which top cities such as Shanghai and Beijing see strong demand and liquidity, but markets in second- and third-tier cities face a supply glut.

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NBA Building Beijing Sports Center

With the sixth NBA China Games starting this month, NBA China and the Yatai Lanhai Investment Group announced a partnership this week to jointly design, develop and build the first-of-its-kind facility in Tianjin's Wuqing District. According to a New York Times article, the NBA Center — a basketball extravaganza that will include a gym and an NBA-themed cafe, a restaurant and a store as well as an interactive gaming area and a children’s zone — will be placed at the center of a $1.5 billion, 2,000-acre property development. The NBA declined to say how much it was investing in the center but said it would be the first of several it planned to set up throughout China.

"The NBA Center will promote the development of sport in Wuqing with its after-school programs and recreational leagues for students, corporations, and local organizations," Luo Fulai, head of Wuqing District, said in a China Daily article.

"This project gives our fans of all ages a permanent destination to experience the NBA on multiple levels — from shopping, dining, and playing interactive games to learning basketball, training and conditioning all under one roof," said NBA China CEO David Shoemaker.

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Architects Find Intriguing CRE Projects in China

With the US Markets still in recovery, many American architectural firms are finding work in China with commissions to build challenging new buildings. The New York Times published a new article examining the opportunities being found in China with firms like Heller Manus Architects, a 25-employee firm in San Francisco, which is now doing two-thirds of its work in China. James Zhen of Goettsch Partners noted that the opportunities may be due to a shortage of Chinese architects with the qualifications to execute large-scale commercial projects. "In my opinion," he says, "what most of them are missing is not the conceptual ideas, but rather the experience and ability to turn the concept designs into reality."

An excerpt from the article:

As Americans take on Chinese clients, they are adapting to some fresh nuances in the architect-client relationship. It's a swirl of patient relationship-building, fast-track decision-making and lyrical moments that, they say, would be unusual in American business dealings.

Chris McVoy, senior partner at Steven Holl Architects in New York, says a developer in Beijing gave the firm three months to develop a concept for a high-rise housing project that replaced a Mao-era factory in the heart of the city. The firm injected into the project Mr. Holl's long-simmering ideas about urbanism, tapping the earth underneath for geothermal energy, and fixing everything it saw wrong with the dreary Soviet-inspired high-rises in Chinese cities.

"We thought they'd say, 'You're crazy, forget it,' and we'd walk away," Mr. McVoy says. "We presented to about 20 people, and when we were finished, of course they all looked to their president to respond first. He said: 'Anybody can build buildings. Few can build poetry.' "

The project was built, complete with glass bridges linking the towers like neighborhood alleys in the sky. It led to the even more radical "groundscraper" headquarters for China Vanke, a big developer based in Shenzhen in southern China. The structure is the size of the Empire State Building laid out horizontally and raised five stories off the ground to provide a public park below.

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