The View | Mainland buyers facing stiffer competition from South Korean and Singaporean investors for property abroad
- Since Beijing restricted capital outflows in 2017, mainland investors have sharply retreated from overseas properties, opening the door for other buyers. Hong Kong, however, remains the destination of choice for mainland outbound investment
Fast forward 3½ years and HNA, which has been frantically disposing of assets across the globe to extricate itself from a severe liquidity crunch, is reportedly in advanced negotiations to sell the property at a 60 per cent discount to the acquisition price.
The facts speak for themselves. According to a report published by Cushman & Wakefield, a leading property adviser, last week, outbound real estate investment by mainland investors and developers fell 63 per cent last year to US$15.7 billion. This was the lowest level since 2014, the year Anbang Insurance Group, another debt-laden Chinese conglomerate, paid the highest purchase price ever for an American hotel with its acquisition of New York’s Waldorf Astoria for nearly US$2 billion in a deal that came to symbolise Chinese investors’ aggressive bids for landmark properties in the top global cities.
In an indication of the extent to which mainland investors are retrenching, Chinese companies almost became net sellers of global commercial real estate last year, disposing of US$12 billion of overseas assets compared with US$15.7 billion of purchases, the report notes. Moreover, two-thirds of respondents to a survey of leading Chinese investors in overseas property assets conducted by C&W said they were “significantly or severely impacted by the prevailing outbound [investment] policy control, sharply up from 50 per cent in 2017”.