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Chinese investors still strong in buying overseas properties

CHINESE outbound real estate investment remained strong in the first half of this year with robust growth in a number of key gateway cities, according to a report released today by international property services provider Knight Frank.

Between January and June, Chinese outbound capital invested in real estate totaled US$10.7 billion, a year-over-year decrease of 13.6 percent. The double-digit drop, however, should be considered in the context of some of the biggest real estate deals in Chinese outbound investment history early last year, such as the US$1.9 billion purchase of Waldorf Astoria Hotel in New York, the report said.

Chinese outbound investment as a whole was gaining momentum, with the biggest push coming from the Chinese economy itself, the report said. Global gateway locations have seen undiminished interest from Chinese investors, helped by favorable local market conditions like market depth, rental growth prospects, and in the case of London, a cheaper British pound.

By country, the US, which had attracted US$5.1 billion worth of Chinese investment in the six-month period, or a 21 percent annual increase, is now firmly established as the most important destination for Chinese capital. New York, in particular, attracted 80 percent of Chinese investment there with a lion's share going to the office sector as Chinese institutional capital continued to chase trophy assets.

UK, meanwhile, recorded an impressive year-on-year rise of 75 percent during the same period. Private banks and conglomerates became a key part of the investment landscape, which was previously dominated by large insurance companies.

Looking forward, Bunny Wang, senior director and head of International Capital Markets and International Project Marketing, China, Knight Frank, believed that Chinese investors will continue to be interested in the traditional gateway markets.

"The buying spree that resulted from yuan's steady devaluation against the US dollar bodes well for gateway markets, at least in the short term," Wang said. "Given the highly competitive domestic real estate market, many investors and developers will remain keen to diversify their investment overseas."


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