(Yicai Global) Oct. 25 -- Although China’s real estate market is still in the doldrums, many foreign investment giants have been expanding and diversifying their investments in the sector over the past year.

Goldman Sachs Asset Management and Sunjade China yesterday announced the setting up of a joint venture to invest an initial USD675 million to acquire, develop and operate new industrial, logistics and cold chain infrastructure projects in first-tier cities and surrounding core cities. The first four seed projects are in Shanghai, totaling 240,000 square meters.

The two companies said they will invest in high-quality assets in core locations, especially in high-standard logistics warehousing.

“We see a bright future in the long-term growth for new infrastructure in China and the world,” said Takashi Murata, head of Asia real estate at Goldman Sachs Asset Management.

Goldman Sachs has been looking to buy Chinese real estate at the right time, taking advantage of the relatively low prices. Late last year, its portfolio management team revealed that it was buying Chinese property bonds to increase “moderately risky” investment assets.

Canada’s Brookfield Asset Management acquired a residential rental project in Shanghai’s Yangpu district from R&F Properties and KWG Group Holdings last month, with a target floor space of 42,000 sqm and 560 rooms. The parties involved have not disclosed the price.

On Oct. 21, the main structure of the Twin Towers F1-D block in Yangpu, the tallest building in Shanghai developed by Tishman Speyer Properties, was topped out. Last November, the American developer announced a multi-use project with New Changning Group in the city’s Changning district, with a land transaction price of over CNY5 billion (USD680 million).

Tishman Speyer also made two major moves in Beijing last year acquiring a single apartment building at CNY2.1 billion and partnering with Beijing Shougang Fund to build an urban regeneration landmark project, Chang’An Mills Shopping Plaza, which opened to the public in the middle of 2021.

Singapore’s CapitaLand has also been making bids. On Oct. 17, Beijing Boruids, an office building, was sold for CNY2.04 billion to a fully-owned subsidiary of CapitaLand.

As of September, a number of foreign companies, including BlackRock, Daiwa House, E-Shang Redwood, Tishman, CapitaLand and Brookfield, have expanded their footprint in China’s real estate market, according to Tao Shuru, a head of research at the China Index Academy.

Their investments have expanded from the acquisition of office buildings in top cities like Beijing, Shanghai, Guangzhou and Shenzhen, to commercial real estate, long-term rental apartments, industrial and logistics real estate, he noted.

Foreign investors are more concerned about portfolio diversification and stable returns, which makes assets related to urbanization and technological progress that are more closely related to macro growth drivers attractive to them, Tao said.

Editor: Peter Thomas