Concrete AnalysisFirms from China to join individuals in new phase of outbound property investment
Institutions will take over from individuals, with the focus on offices, shopping malls and construction projects around the globe
Outbound investment from the mainland to markets around the world tripled year on year to about US$8.3 billion in 2013, a recent study by property services company CBRE and research firm Real Capital Analytics found.
Stories of upwardly mobile Chinese scouring markets around the globe and purchasing high-end residences in places like London, New York and Vancouver are now old news.
Last year, investment in real estate entered a new phase, characterised by cross-border institutional investment in commercial real estate. In the future, cross-border investment in real estate will no longer be limited to individuals dabbling in residential real estate. In the new phase, entrepreneurial and institutional investors will increasingly target office buildings, shopping malls, hotels and construction projects.
There are several key trends to watch in the new phase.
Sovereign wealth funds are key participants around the world in cross-border real estate investment. To date, the China Investment Corporation (CIC) has been the mainland's most active sovereign fund cross-border real estate investor.
In the new phase of outbound real estate investment, China's State Administration of Foreign Exchange (SAFE) and the National Social Security Fund (NSSF) will likely join the CIC as active players and may bring to the table substantial capital to deploy into global real estate and real estate funds.