China’s appetite for overseas property investment set to grow

By: Xavier Basil
Xavier Basil
Born in Angola and brought up in Portugal, Xavier came to the iNVEZZ team via a previous career as… read more.
on Jan 27, 2015

The volume of China’s overseas property investment is set to reach $20 billion this year, a 21-percent increase from 2014, according to a report released yesterday by Jones Lang LaSalle Inc. The estimate is based on an ongoing trend in the People’s Republic of a growing number of domestic real estate developers and insurers globalising their portfolios.

“The easing of restrictions over the last a few years by the Chinese government has (made it) … much easier for institutions as well as individuals to move money overseas,”said JLL’s David Green-Morgan, as quoted by Reuters.
Chinese investors have taken advantage of the softer rules, demonstrating a growing appetite for overseas property investment. Last year, Chinese investors spent $16.5 billion on offshore property, 46 percent more than in the year before. Nearly 70 percent of this investment went into commercial real estate, JLL said.Europe was the most popular destination for Chinese property investors, attracting $5.5 billion.

Chinese insurance companies have been particularly active buyers on the global markets. Since 2012, when China’s insurance watchdog allowed firms to invest in property outside the mainland and Hong Kong, local insurers have invested around $24 billion outside the PRC, according to Zhou Yanli, vice chairman of the China Insurance Regulatory Commission. In a press briefing on Friday, Zhou said that last year about 20 percent of insurance investment overseas was funnelled into real estate.
Chinese real estate developers have also stepped up efforts to internationalise their holdings in an attempt to counter a slowdown in China’s property market. Yesterday Dalian Wanda Group announced its second investment in Australia, a $1billion deal for two buildings in Sydney.

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