Overall Asian outbound investments hit $60bn in 2016, down 4% from the peak seen in 2015. China continued to lead.
Among capital from China, institutions and corporations dominated about three-quarters of the investments, followed by developers (13%), other collective investment vehicles (5%) and private investors (5%).
Chinese outbound property investments
|
2016 |
y-o-y change |
|
|
H1 |
$16bn |
+119% |
|
H2 |
$12bn |
+17% |
|
Total |
$28bn |
+60% |
Source: CBRE
But the amount shrank in the second half of last year from the first half. CBRE believes the increased scrutiny of cross-border capital flows is likely to lengthen the deal process and hence slow the pace of such investments in 2017.
“Property investments by state-owned enterprises above $1bn, and investments of $1bn or more by any Chinese company in an overseas entity unrelated to the investor’s core business, face stricter regulatory approval. It is expected that Chinese investors will shift to smaller-size transactions to avoid the stricter supervision from the government,” the firm said.
“Regardless, Chinese appetite for global real estate investment will remain solid but more cautious, with Chinese insurers and qualified asset managers being the active institutional investor class,” Yvonne Siew, executive director of CBRE Global Capital Markets said in the statement.
No home bias
The majority of the Chinese money poured into offices and hotels. The US, Hong Kong and the UK were the top three destinations.
In terms of Asian real estate investors, the US is also the most favoured country, accounting for 43% of total outbound real estate investments. EMEA ranks the second (27%), followed by Asia (23%) and Pacific regions (7%).
Source of outbound real estate investments (US$bn)
|
|
2015 |
2016 |
y-o-y change |
|
China |
17.6 |
28 |
+60% |
|
Singapore |
19.3 |
12 |
-38% |
|
Hong Kong |
10 |
8 |
-20% |
|
South Korea |
7 |
7 |
0% |
Source: CBRE
“Asian investors are now showing more interest and seeking out assets in more diverse markets globally. Compared to 2015, more capital was deployed to alternative gateway cities in search of attractively priced opportunities,” CBRE Asia-Pacific director of research Robert Fong noted.
The sought-after markets include France and the Netherlands in continental Europe, Chicago, San Francisco and Washington in the US, Vancouver in Canada.
There is increasing interest in niche sectors such as healthcare and student housing, the firm added. Investors appear to be exploring opportunities outside conventional asset classes in search of higher yield.
