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March 12, 2019

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China drags on Asia real estate funds

Asian outbound real estate investment plunged last year, mainly due to a sell-off by Chinese mainland investors, international property consultancy CBRE said yesterday.

A total US$53.8 billion from Asia was invested in offshore real estate, a drop of 36 percent from 2017, according to CBRE’s 2018 Outbound Investment Survey.

Chinese investment dived to US$7.5 billion from US$35.4 billion in 2017.

“On one hand, the Asian outbound investment story in 2018 was characterized by clear moderation from China’s mainland,” Leo Chung, associate director of research at Asia Pacific CBRE said. “On the other hand, it represented cyclical portfolio rebalancing and strategic preparation for future activity.”

Chinese mainland investors transitioned to net sellers in the second half of the year to strengthen balance sheets and recycle capital for deployment into future outbound investments.

The pullback from Chinese mainland investors was not entirely unexpected, but created opportunities for new strategic investors to boost offshore investment, Chung said.

Singaporean and South Korean investors strengthened their positions last year as more visible offshore real estate investors — at US$21.6 billion and US$7.3 billion, respectively.

That compared with US$20.9 billion and US$6.3 billion in 2017.

Investors from Malaysia and India also became more prominent by more than doubling and tripling offshore real estate investment.

The EMEA (Europe, Middle East and Africa) region remained the leading destination for Asian outbound capital in 2018, attracting US$21.5 billion.


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