Sunday
October 19, 2014

Chinese Investors Tee Up for Move on U.S. Golf Courses

|
-A A +A

Chinese Investors Tee Up for Move on U.S. Golf Courses

Wealthy Chinese investors are adding a new trend to their wishlists for U.S. properties: Golf courses.

In the last year alone, Chinese investors have snatched up prime golf properties, including the 2,000-acre Sea Trail Golf Resort in Sunset Beach, N.C., to smaller courses like the Rancho Duarte Golf Club in the San Gabriel Valley.

"We're seeing a lot of tires getting kicked by the Chinese," broker Jeffrey Woolson, managing director for golf and resorts at real estate services giant CBRE Group Inc. in Carlsbad, Calif., told The Los Angeles Times. "They only recently came forward and started buying. They do love golf, so it makes sense."

Learn more about Chinese buyers:

The increase in interest from Chinese investors in U.S. golf courses is helping to give a boost to some unprofitable clubs. Du Sha, a Chinese investor with a net work of more than $600 million, acquired Pacific Links International, which owns 10 high-end golf courses in the U.S. Pacific Links has committed $6.2 million to refurbish the Dove Canyons club.

“The Chinese are buying at the bottom of the market,” The Los Angeles Times reports. “But they are entering an overbuilt industry that has suffered from declining American interest in golf since well before the Great Recession drove many courses into bankruptcy.” But in China, golf has been growing in popularity.

For many Chinese investors, they are viewing golf courses in the U.S. as a bargain right now too. "You're seeing courses sell for less than $2 million that back in 2004 or 2005 would have cost more than $5 million," says Chris Charnas of Links Capital Advisors, a brokerage in the Chicago suburbs.

There has been some improvement in golf course prices recently. For the first time since 2006, the median prices of courses is up slightly, according to an analysis by Marcus & Millichap, which referred to 2013 as a “pivotal year of improvement” for the golf industry.

Source: “Chinese Investors Buying Up U.S. Golf Courses,” The Los Angeles Times (June 14, 2014)