Chinese investors dominated Asian outbound real estate investment last year, according to a new report from CBRE. China accounted for almost 50 per cent of total investment while overall activity from Asia as a whole remained robust. The charge was led by institutional investors who were responsible for 6 of the top 10 largest outbound deals in 2016.
“Chinese investors remain active in deploying capital offshore into global real estate assets. Despite recent policies by the government restricting Chinese outbound investment, there continues to be a steady flow of Chinese capital overseas as investors seek to diversify their portfolios,” says Yvonne Siew, Executive Director, CBRE Global Capital Markets.
The US continues to be the most popular destination for Asian capital, drawing 43 per cent of total outbound investment from Asia. Europe was the 2nd most popular destination while there was also an increase in intra-regional activity in 2017, research from CBRE shows.
“With more scrutiny on cross-border capital flows and rigorous checks by the government which may lengthen the approval process, Chinese outbound real estate investment may moderate, gathering at a more sustainable rate. Instead of larger transactions, Chinese investors may simply opt for a higher number of smaller deals. Regardless, Chinese appetite for global real estate investment will remain solid but more cautious, with Chinese insurers and qualified Asset Managers being the active institutional investor class,” says Siew.
New York was the top metropolitan location for outbound investment last year surpassing London, which was the 2nd most popular. Hong Kong, Seoul, and Sydney rounded out the top 5 most popular outbound investment destinations.
“Asian investors are now showing more interest and seeking out assets in more diverse markets globally. Compared to 2015, more capital was deployed to alternative gateway cities in search of attractively priced opportunities. Places in Continental Europe such as France and the Netherlands; Chicago, San Francisco and Washington in the US; and Vancouver in Canada, are now on more investor radar screens,” says Robert Fong, Director of Research, CBRE Asia Pacific.