Isle exec to build
China housing

Acquisition Research Corp.
to be part of $70 million
joint venture

By Jerry Tune
Star-Bulletin

A Honolulu-based investment counselor has been tapped to develop two housing projects in China, including a 900-unit affordable project in Shanghai.

Dianne Willoughby, president of Acquisition Research Corp., said she will be a joint venture partner with the Shanghai South Bund (Group) Co., a state-owned company, for a $70 million project near the Bund financial district. The developers will tear down substandard housing and redevelop two blocks of city-owned land.

"It includes seven new buildings with landscaped green areas," Willoughby said.

She is arranging the construction financing from either a New York bank or an international investment fund.

Willoughby also is trying to put together a senior citizens housing project outside of Beijing. An agreement with the Chinese government, signed in June, makes Willoughby the current developer of the project on government-owned land. "We're looking for an American partner experienced in seniors housing," she said.

The Chinese government ended its policy of subsidized housing to workers on June 30 and is encouraging workers to buy apartments. Permanent financing is available through the Bank of China and the other four commercial banks in China, she said.

The two projects are being made possible by the Chinese government shift toward a market-driven economy, which includes Western-style of real estate ownership after many years of government subsidized housing.

"They are making some brilliant moves on the economy," said Willoughby. "In recent years, China has had double-digit growth rates and low inflation."

The China Daily reported on July 8 that Chinese banks are competing to get a foothold in the emerging housing financing business. The Chinese government hopes this stimulus will help China reach its target of an 8 percent economic growth rate this year.

Willoughby first came to China in 1980 on a University of Hawaii East-West Center tour and has been advising and teaching finances in China for many years. In 1995, she opened a two-person office in Beijing. The Chinese government commissioned Willoughby to teach a class for government officials on how to package a property for foreign financing.

She has worked as a consultant in development, planning and leasing projects in Beijing, Xiamen, Badaling, Shanghai, Hubei Province and other markets. Her efforts have arranged debt and/or equity financing for several projects, including restaurants, power plants, roads and bridges.

"Up until August last year, 100 percent of that financing came from Asia, mostly from Singapore and Hong Kong but now we are looking at broader sources from the United States and Europe," Willoughby said.

The Commercial Investment Real Estate Institute, based in Chicago, recently named Will-oughby an economic "international ambassador" to China and Asia. The group's ambassador program is designed to promote United States real estate methods abroad. She is one of only four such ambassadors chosen by the group.