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November 11, 2016

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Home » Business » Real Estate

Funds in overseas realty remain strong

By Cherry Cao | November 11, 2016, Friday | Print Edition

CHINESE outbound real estate investment fell overall but grew robustly in key markets in the first half of this year, a report released yesterday by international property services provider Knight Frank said.

Between January and June, Chinese investors pumped in US$10.7 billion in real estate overseas, a year-on-year fall of 13.6 percent.

The double-digit drop, however, should be seen 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 investors have continued to show keen interest in global gateway locations because these cities have market depth, rental growth prospects, and in the case of London, a cheaper pound, the report said.

The United States, which had drawn US$5.1 billion worth of Chinese investment in the six-month period, or a 21 percent annual jump, is now firmly established as the most important destination for Chinese capital. New York, in particular, attracted 80 percent of Chinese investment with the lion’s share injected in the office sector as Chinese institutional investors continued to chase trophy assets.

Chinese investment in the UK surged an impressive 75 percent year on year during the same period. Private banks and conglomerates became key investors, which was previously dominated by large insurance companies.

Bunny Wang, head of international capital markets and international project marketing at Knight Frank China, believed that Chinese investors will continue to be interested in the traditional gateway markets.

“The buying spree that resulted from the yuan’s steady devaluation against the US dollar bodes well for gateway markets, at least in the short term,” Wang said.

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