The booming life sciences cluster in South San Francisco looks set to benefit from another major cash injection -- this time with the help of Chinese backers.
A joint venture between China's state-backed property developer Greenland Holdings and private equity firm Ping An Trust snapped up The Landing at Oyster Point, a site smack in the middle of South San Francisco's booming biotech scene. And the Chinese investors plan to sink up to $1 billion into developing the project.
Shanghai-based Greenland will own 49% of the project, with Ping An holding 36% and two smaller partners--Agile Group and Poly Sino Capital--taking the remainder.
Initial reports indicate that Greenland paid about $171 million for the site, with the Economic and Community Development (ECD) for the City of South San Francisco indicating that phase one construction will start in mid-2017 and complete in late 2019.
Mike Futrell, city manager for South San Francisco, told FiercePharma that the first phase of the project will be an office and laboratory complex of around 508,000 square feet, which should house around 1,500 life science workers.
"For the later phases of the project, it’s too difficult to predict," said Futrell, although he expects subsequent phases to "follow closely behind, with the entire project built in the next five years."
The project is backed by $30 million of infrastructure funding from the city that will be used to transform the city's waterfront, but other than that there were no financial incentives offered to the Chinese developers.
South San Francisco already ranks as one of the two most sought-after locations for drug development in the U.S., the other being Cambridge, MA. The city boasts 240 biotech companies--including Roche's Genentech--and around 11 million square feet of biotech R&D space, according to Futrell. The new project, along will other initiatives, will boost that past 17 million square feet, he said.
"Of the many biotech construction projects under construction or planned, Greenland's project with 2.25 million square feet is the largest single project," Futrell said, "and is an affirmation of South San Francisco as the biotech capital of the world."
Other new developments in the city include Biomed Realty's project to develop two sites that together account for 1.46 million square feet of property development, he added.
The deal comes at a time when Chinese investment in the U.S. across all industrial sectors is surging, reaching $18.4 billion in the first half of the year, almost three times the amount racked up during the first six months of 2015, according to figures from Rhodium Group.
Healthcare investments account for a small proportion of the total foreign direct investment (FDI) heading to the U.S. from China, however, with much more activity in consumer products and services, real estate, and the IT and automotive industries.
In the last year there have been 14 Chinese FDI deals involving healthcare/biotech in the U.S. with a total value of $759 million.
- read the Greenland US press release
Amid closures and cuts, Genentech starts building
Merck to ax R&D staff while also boosting research site investment
Google med tech play Verily to relocate to former Onyx space in South SF
Alnylam looks at building $100M plant outside Cambridge
Biogen targets Cambridge plant, up to 285 jobs at risk