China takes No 2 spot in overseas property investment
Outbound acquisitions around the world have slowed as stock market volatility dampens appetite
Outbound real estate investment around the world has slowed as stock market volatility dampened appetite, but that has not stopped Chinese companies from being one of the top spenders in foreign properties.
Chinese investment in commercial property and land deals totalled US$3.5 billion in the first quarter of this year, down 20.5 per cent year on year, according to figures from real estate agency Jones Lang LaSalle.
Still, China moved up one spot to become the second-most active cross-border investor after Germany.
The North American capital is much more sensitive to movements in the equity market
In the first quarter of last year, the United States and Canada outpaced China and Germany by a wide margin, each investing more than US$7 billion in overseas properties, compared with China’s US$4.4 billion.
“The Canadians and the Americans were the big investors outside their countries [this time last year], but that’s really dropped back because of the volatility in the stock markets and the North American capital is much more sensitive to movements in the equity market,” said David Green-Morgan, director of global capital markets research at JLL.
Money from Chinese companies has been flooding into the international property market as buyers embrace the country’s “go global” ethos. They are also spurred by fears of a depreciating yuan.
“Last year, we recorded US$25 billion worth of Chinese outbound activity, and I think we’ll be very close to, if not beating, that figure again in 2016,” Green-Morgan said.