Asian Investment In Overseas Real Estate Led By China

Real estate investors from Asia favored the United States more than any other market in 2016. These continued for the second consecutive year. America received a whopping $25 billion out of a total of $60 billion invested by Asians all over the world. A large chunk of these investors are institutional ones. Chinese investors made the most movement, making 47 percent or $28 billion of the total investment made by Asians.

US wins

London was surpassed by New York as favored investment metro area in 2016. The premise holds true even as the share of investment declined during the year compared to 2015. Investors favored other metros like Sydney, Seoul and Hong Kong as well. These five metros sucked in 37 percent of total Asian investment, as compared to 2015’s 42 percent. This happened as Asians continued to diversify investments.

Other than the Chinese, South Korean, Singapore and Hong Kong investors, Indians are also fast emerging as a spigot of capital. The Japanese have also stepped in, with most of their investments being made in the United States. It is expected that 2017 will see a rise in Japanese investments in the US.

This trend continued even as the PRC Government inserted policies which clamped down on such overseas investments made by Chinese nationals. It is apparent that the Chinese are interested in diversifying holdings. Yvonne Siew of CBRE Global Capital Markets opines that with increasing scrutiny on capital flows across international borders and rigorous government checks, the approval process can be a lengthier one. Real estate investment by Chinese nationals could slow down, but can turn more sustainable. Investors from China could opt for smaller deals instead of one big deal. The Chinese appetite for international real estate investment could remain but it will be more cautious. The institutional investor class will then be Chinese qualified asset managers and insurers.

Other destinations and types

It has been reported by the CBRE that the Europe, Middle East and also Africa, termed EMEA region, was a favored investment destination. The EMEA attracted about 27 percent of total Asian investment. Investors from Asia also exhibited partiality to the Asian continent itself, putting about 23 percent of total investments in 2016. In 2015, it was 21 percent.

When it came to property types, investors from Asia preferred office properties. Commercials made up about 50 percent of total investment, with the location of such assets being skewed towards “gateway” metropolises of Hong Kong, New York and London.

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