Foreign buyers increase share of China commercial property deals, spend US$3 billion in three weeks

Overseas investors, mostly from Hong Kong, have cornered a large share of mega commercial property deals in mainland China, with their share of the pie surging to record levels in Beijing as well as Shanghai.

These investors have spent more than 23 billion yuan (US$3.3 billion) in at least five publicly announced deals involving commercial property in the past three weeks, even as local investors find themselves curtailed by Beijing’s credit tightening policy. These deals include one each in Beijing and Guangzhou, two in Shanghai and one involving a portfolio of assets across five cities.

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And according to Grant Ji, head of CBRE North China’s capital markets, in Beijing, with three deals recently announced and a few more in the pipeline, the share of overseas investors could rise to 40 per cent for 2018, an unprecedented level for China’s capital city.

“Local competitors’ hands are tied by tight financing conditions, stricter approval [processes] and property market curbs, while overseas investors have an edge, such as access to international funds and shorter procedures,” he said.

“Sellers are keen on international investors, as they have become less confident about local bidders.”

In a deal Ji helped close last week, a shopping centre worth 2.56 billion yuan in Beijing’s Tongzhou district was sold to Hong Kong-based Link Reit. The transaction, the largest for a single retail asset in Beijing this year, took just five months, and not the nine to 15 months it usually takes in the city.