Chinese investors make a beeline for overseas hotel assets
Outbound deals by Chinese companies soar as prime assets become scarce in domestic markets
Outbound property investment by Chinese companies more than doubled from a year ago as a scarcity of profitable domestic assets saw investors shopping abroad to diversify their asset portfolios during the first six months of this year.
According to data from CBRE, China’s outbound property investment rose by 144 per cent to US$16.1 billion during the first six months of the year, compared with US$6.6 billion during the same period a year ago. China’s outbound investment as a share of Asian investment rose from 34.7 per cent a year ago to 60 per cent.
“Demand for overseas assets rose as a growing number of companies are keen to reduce their exposure to local market risk. The lack of investable domestic assets is another important reason,” said Alan Li, head of investment and capital markets for Greater China at CBRE.
According to Li, Chinese investors have increased their investment in US markets, especially in gateway cities, due to the country’s stable economic performance in the first half. Chinese investors have also been active in various asset classes like offices, hotels and retail spaces.
Chinese insurance companies accounted for about US$8 billion, or half of the total overseas investment. Anbang Insurance alone spent more than US$7.3 billion on overseas acquisitions in the first half. In March, the firm brought US-based Strategic Hotels & Resorts, with a portfolio of 16 hotels, from Blackstone Group for US$6.5 billion. China Life, a state insurer, paid US$500 million to buy New York’s PaineWebber Building.