Chinese Investment Lands in Montreal at YUL Condo Project

Chinese money is starting to find its way into the Montreal real-estate market in a significant way.

As the economy slows at home, Chinese investors are looking to diversify abroad and Montreal represents an undervalued opportunity, says Steve Di Fruscia, chief executive of Tianco Group, a Canadian real-estate developer controlled by Chinese shareholders.

Tianco has joined up with Montreal-based Brivia Group to develop the $300-million YUL condominium project in downtown Montreal on the south side of René Lévesque Blvd. between Mackay and Bishop Sts.

The development slated to open in 2017 features two 38-storey towers housing 800 units as well as 17 townhouses. The historic Louis-Hippolyte Lafontaine house at the southeast end of the property on Overdale Ave. will be restored as a single-family home, fulfilling a condition set by the city of Montreal.

Tianco is close to announcing other investments in Montreal real estate, said Di Fruscia. The company is active in Vancouver and wants to diversify into other markets

The YUL development represents one of the biggest condo projects underway in Montreal. Tianco is the first Chinese-held company to invest in the development of highrise condominiums in the province of Quebec.

Its partner Brivia Group is run by a Chinese Canadian, Kheng Ly, who has developed several local real-estate ventures, including Innova Condos in Ahuntsic, C3 Cavendish in N.D.G. and Le Condoval in Laval.

“He’s been living out here for 26 years and has been busy in real estate for 13 years. They have quite a bit of real estate under their belt,” Di Fruscia said. 

“That’s another reason why (Tianco) wanted to get involved in this project — because of Mr. Ly.”

The two parties came together after they were introduced by the Bank of China’s office in Montreal.

Tianco has two deep-pocketed Chinese shareholders with plenty of experience and financial backing, Di Fruscia says.

“Our major shareholder (Han Qing) is one of the dominant real-estate figures in China, he’s the largest developer in the province of Gansu in northwestern China. Every year he’s doing about 10 million square feet of buildable space, so he’s coming from an enormous real-estate background.

“Now that conditions in China are softening, he and a lot of other companies are starting to look abroad for investment opportunities. That’s been the case with Tianco for the past two years.” 

A second shareholder is a woman, Qu Jinye, who has extensive real-estate experience in China’s auction business, he said.

“They come from a very, very strong financial background and are able to build very high capital within our organization.”

Di Fruscia said that, at least for now, the primary goal is to market YUL to Montrealers rather than to Chinese buyers. 

“We believe strongly in the local market, so we would like to pursue local efforts within the city. Potentially in the future, we will look into marketing properties in China and possibly other parts of Asia.” 

The condo markets in Vancouver and Toronto are extensively driven by Asian money looking for an investment home rather than a personal residential home. Di Fruscia said the same thing could “potentially” happen in Montreal, but the market here is more balanced in terms of residential demand so sales efforts in Asia “don’t make as much sense to our eyes.”

Pre-sales of the YUL project began in September 2013 and about 50 per cent of the units are sold, he said, dismissing concerns about overbuilding or saturation of the market.

The Tour des Canadiens, Roccabella Montreal and Icône Condominiums are all large residential projects in the downtown core.

“Those are all directly comparable and their sales are going well, but we don’t see them as competition because of our (downtown) location.

“We feel the Montreal market has a lot of potential moving forward. There is a lot of talk about overbuilding, but I believe it’s not based on facts.

“Montreal is not a condo market just yet. It’s still one of the biggest rental markets in North America. It’s a matter of transitioning from renting to buying.”

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