The Warren Buffett of China, investment conglomerate Fosun International, has added another low priced high value investment property to its portfolio. It’s been reported that Fosun acquired a prime peace of seaside real estate in Greece for a mere $915 million euros or $1.26 billion.
Fosun International is known for their aggressive means of acquiring bargains across a variety of sectors and locations. This recent sale was the result of a team effort between Fosun, Greek real estate firm Lamba Development and Abu Dhabi developer Al Maabar. The seaside property was formerly home to Athens’ Hellenikon airport. Reuters reported that sources close to the deal say that Fosun’s bid has been accepted by the parties responsible for the property. The property is said to be comparable in size to Central Park and includes a functioning three hundred thirty seven birth marina. Managed by Chinese billionaire Guo Guangchang, Fosun owns Shanghai based developer Forte. Fosun is no stranger to the American market, last year acquiring One Chase Manhattan Plaza from JP Morgan at a price of $725 million. The transaction was one of the biggest foreign investments by a Chinese company during 2013.
With the Greek economy in chaos, Greece’s Hellenic Republic Asset Development Fund (HRADF) privatization agency is required to raise 3.6 billion euros or $4.95 billion from asset sales this year, a condition of the international bailouts that are keeping Greece afloat since 2010. Fosun and partners purchased this seaside real estate from a seller under severe pressure due to the HRADF. This latest deal for Fosun is in keeping with its move in January when they acquired Portuguese insurance firm Caixa Seguros e Saude from the Portuguese government for 1 billion euros or $1.36 billion dollars. Pressured under conditions set by a 78 billion euro aid package, Portugal inked the deal with Fosun.
With his beginnings in the Chinese real estate market, the company has a goal of investing in in a technique like mogul Warren Buffett. It is branching out its projects in all sectors from retail to medical, acquiring assets on three continents. Its aggressive means of acquiring real estate, that of taking advantage of the trouble real estate prices in Greece while others have shied away, follows in the footsteps of Buffett who follows a ‘buy low’ philosophy. There was no competition for the seaside property as Fosun was the only bidder. Even as aggressive as Fosun is, they prefer to hedge risks by sticking with experienced local partners for the local knowledge needed to close the deal without being on the foreign territory.
Fosun is no stranger to Greek assets as this is the second major Greek investment by the firm. The firm is the second biggest shareholder in the Greek fashion retailer Folli Follie, having acquired a 9.5% stake in that company in May 2011.
As foreign investors continue to play a major part in the international real estate market, it remains to be seen how these sales will affect the real estate industry both abroad and at home.
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