Sept. 26 (Bloomberg) -- The Chinese billionaire who is investing $200 million to develop a resort in Iceland said he will use the project as a springboard for resorts in other Nordic countries.
Huang Nubo, 55, said he plans to establish resorts in countries such as Denmark, Finland and Sweden within five years. He’s in talks to buy 300 square kilometers (116 square miles) of land in Iceland for $8.8 million from five farmers and expects the Iceland government’s decision on the approval of the purchase within two weeks.
The developer is expanding outside China as investors take advantage of declining global asset prices amid a market rout. Iceland’s OMX Iceland All-Share Index has fallen 85 percent in the past three years amid a banking meltdown in the nation and the 2008 global financial crisis, compared with the 12 percent drop in the MSCI World Index.
“This deal is attractive, and is also good for my expansion in the Nordic countries,” Huang said. “Had there been no financial crisis, they wouldn’t sell the land. Of course we should buy low.”
Iceland is recovering from a banking crisis in 2008, which sent the krona down about 80 percent against the euro before the central bank halted the selloff with capital controls. Since then, the country has used the currency restrictions to protect its economy and to appease creditors seeking to recoup some of the $85 billion Iceland’s banks defaulted on three years ago.
Iceland’s second-quarter home prices increased 3.8 percent from a year earlier, the 19th-biggest gain among 50 markets in a Knight Frank LLP survey.
“If I have the site in Iceland, then I’ll expand to other Nordic countries,” Huang, who said he’s a poet and has climbed Mount Everest three times, said in an interview in Shanghai yesterday. “I’ll buy land and build resorts in Nordic countries, but they won’t be the magnitude of the project in Iceland.”
Huang, founder and chairman of Beijing Zhongkun Investment Group Co., was estimated by Forbes magazine to have a wealth of $1.02 billion. He said he’s worth more than that “for sure” as his shopping mall in Beijing alone is valued at more than 43 billion yuan ($6.7 billion).
He said he doesn’t need a share sale to raise funds for his new ventures. “Why should I?” he said. “I’m not short of money.”
Huang said his connection with Iceland started 30 years ago when he was studying at Peking University. His roommate and good friend back then was from Iceland and later married a politician. Huang donated $1 million last year to set up an Icelandic- Chinese poet-exchange program.
In China, Huang is known for helping restore the 200-year- old villages Xidi and Hongcun around Huangshan mountain in eastern Anhui province, which are now included on the UNESCO world heritage list. He later built and operates resorts near the villages.
“Huang has an artistic style and his company is good with tourism properties,” Richard Wang, a Beijing-based director and head of DTZ Consulting’s North China branch, said in a phone interview. “It’s a question whether his success inside China can be replicated overseas.”
If approved, the resort would be the biggest land purchase by a foreigner in Iceland, and it would be his company’s largest investment overseas after buying properties in California and Tennessee, Huang said.
--Bonnie Cao. With assistance from Omar R. Valdimarsson in Reykjavik. Editors: Linus Chua, Andreea Papuc
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