Already more than 1.5 times that of total China-sourced outbound flows to U.S. commercial real estate in 2014
Key Highlights:
- Chinese investors are rapidly expanding their reach and influence across global real estate markets. In the first half of 2015, China outbound flows to commercial real estate experienced year-on-year growth of approximately 46% to reach US$6.6 billion, accounting for more than a third of total Asian-sourced capital flows over the period.
- The U.S. and Australia have experienced rapid growth in China-sourced capital flows. Chinese investment in U.S. commercial real estate totaled US$3.676 billion for the first half of 2015, over 1.5 times that of total annual flows (US$1.962 billion) in 2014. Aggregate Chinese investment (US$1.664 billion) into commercial real estate in Australia for H1 2015 also surpassed that of 2014 (US$1.467 million).
- Although there was a slight decline in China-sourced investment flows into U.K. commercial real estate for the first half of 2015 compared to the same period last year (US$704 million for H1 2015 versus US$756 million for H1 2014), London continues to be among the most preferred destinations for Chinese investors.
- Chinese institutional capital is playing a key role in driving outbound flows, due in significant part to purchases of hotel and premium office assets by mainland insurers looking to diversify their investment exposure.
Frank Chen, Executive Director & Head of Research, CBRE China commented, “Between 2013 and H1 2015, total Chinese investment into prime office space in the U.S., U.K. and Australia has reached US$11.243 billion, more than twice of that for the hotel sector (US$4.311 billion) and more than six times that of the investment in retail (US$1.789 billion). Much of this investment has been targeted at premium office and hotel assets in global gateway cities such as New York and Los Angeles in the U.S., London in the U.K. and Sydney in Australia. Going forward, however, we believe that Chinese investors will increasingly expand their investment scope to include a wider range of geographies and property types. As they gain experience and develop a local reputation in the market, for instance, more Chinese investors in the U.K. are likely to expand their search of office properties outside of London to cities such as Manchester, as well as increasingly seek out opportunities to invest into retail properties.”
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