China’s direct investment into international real estate in 2013 has already surpassed the total amount spent in 2013 as Chinese capital floods into global property markets.
According to a statement today by Jones Lang LaSalle, Chinese offshore real estate investment is up 25 percent through the end of the third quarter, compared to the same period in 2012. The real estate consultancy reports that Chinese offshore real estate investment volumes for 2013 have exceeded US$5 billion, already up on the old record of US$4 billion in 2012 full-year.
These figures exclude purchases of company’s holding real estate as well as home or commercial purchases made by individual private investors.
As investment has grown, the destinations for offshore capital have remained broadly consistent, Chinese real estate investors have been most active in Europe, the US, Australia and Singapore. Interest in Europe, particularly, has increased since 2012, with transaction volumes up 25 percent in 2013 to almost US$2 billion.
Investment by region: European Union (blue), Asia Pacific (grey) and the Americas (red)
David Green-Morgan, Research Director, Global Capital Markets, Jones Lang LaSalle said, “Europe was an early focus for the Chinese investors with a number of deals completed in the UK over the last three years. This has continued in 2013, but the focus has widened, and we have seen deals occur right across continental Europe with increased investor interest in Southern and Central Europe. However, the UK remains the most sought after market in Europe as core residential and office assets in Central London remain popular with investors looking for high yields.”
Investor appetite for assets in the US, Australia and Singapore has also increased with Chinese investment into commercial real estate markets.
In Australia, the transaction volume is up almost 100 percent this year and has reached US$500 million. Earlier in the year, a US$1 billion mixed use hotel and retail scheme in Singapore was sold to Bright Ruby, making it the largest single commercial property transaction in Singapore’s history.
After several years of speculative interest, Chinese investors have made some significant purchases in the US real estate markets this year with total investment reaching over US$2 billion in 2013 and additional deals expected to compete in the final quarter.
Darren Xia, Director, International Capital Group, Jones Lang LaSalle China, noted: “So far, Chinese outbound investment has mainly focused on the world’s global cities and gateway markets such as Ping An in London, Greenland in New York and Bright Ruby in Singapore.”