Chinese investors lead in global property buys

Added 24th August 2015

The hunt for yield has led Asian institutional investors to increase allocations to global real estate commercial properties, according to CBRE.

Chinese investors lead in global property buys

During the first six months of the year, the total investment in offshore commercial property made by Asian investors rose 13% to $19bn, said the real estate services provider.

Chinese investors took the lead, investing $6.6bn in global real estate followed by investors in Singapore ($4.4bn) and in Hong Kong ($2.2bn). 

“This year we have really seen Asian outbound investment broaden with the US overtaking the UK as the preferred destination,” said Marc Giuffrida, executive director for global capital markets.

Of the total $19bn, the biggest investments were in the US ($6.1bn) and the UK ($4.4bn). 

As for property type, hotel investments accounted for 30% or $5.8bn of total Asian offshore investments globally during January-June.

“This was largely supported by a number of major acquisitions by Chinese insurance firms, including the $1.95bn purchase of the Waldorf Hotel in New York by Anbang Insurance Group,” the report said.

Offshore search to expand

Asian investors, in particular those in Taiwan, are facing low yields in their home markets.

“As Taiwanese insurers are unable to meet required investment returns due to low yields in the domestic market, we foresee their continued hunt for offshore opportunities in the near future,” said Ada Choi, senior director for Asia-Pacific research.

Taiwanese investors are showing a preference for overseas diversification and have invested $1.8bn in the first six months, surpassing $1.3bn made during the full year 2014.

“As more Asian investors are looking abroad to diversify a growing pool of domestic wealth, overseas market dynamics such as stable fundamentals, regulatory support and market transparency will continue to drive them to pursue offshore opportunities,” said Choi.

The research includes only commercial real estate transactions above $10m, and excludes development sites and residential for self-usage.

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