The construction of a building in Shanghai (China)
His foray into real estate is directly linked to their activity in China through Alsa. As explained by the family in a recent private meeting, once the bus business began to generate substantial profits, Cosmos were in the position to consider the option to reinvest capital gains in the Chinese market or repatriate dividends from. The final bid was a brick for rent in large urban areas, clearly an emerging market expansion.
The decision, as explained family members in a private forum, he also had other motivations. According to Chinese law, foreign companies are subject to tax, as local companies and the repatriation of foreign exchange requires only an administrative formality. However, there is an extra 10% withholding on capital gains out of the country want, So at times, and to the strength of economic activity in China, may be an option to reinvest doubly attractive.
For years, the family policy in China has been reinvesting all the money that would generate local business, the head of which is Andres Cosmesince 1987, while his brother James Cosme acts as president from Asturias. However, from 2005, when the family decides to merge with British transport giant National Express, in exchange for 10% of the combined, just over 200 million and to continue the China subsidiary, the family decided to diversify into other non-transport fields.
No one guaranteed to Cosme, however, success in your real estate venture. As has happened before in other growing economies, the Chinese housing market is subject to a clear overheating. It reflects a recent report by China Academy of Social Sciences, which estimated the existence of some 64 million empty apartments and houses in urban areas. Ie housing stock for about 200 million people, where the urban population is less than a third of this figure.
Despite being the first shareholders of National Express, Cosme family was interested in taking full control of the company in the hands of private equity fund CVC. After giving up on this operation, the Asturian family supported the merger with the Scottish Stagecoach, which eventually was also unsuccessful. The maelstrom of mergers and acquisitions, as demonstrated after taking Enatcar or Continental-Auto, does not scare the family Asturias. Neither the Chinese market ... if not for their first steps in the housing market