Outbound Investment Falls 51% to 14-Quarter Low
HONG KONG, CHINA–(Marketwired – Nov 21, 2017) – According to Cushman & Wakefield’s recent report “China Outbound Investment,” Chinese outbound real estate investment fell 51% y-o-y to US$2.5 billion in Q3, the lowest total in 14 quarters. The decline came amid new outbound investment restrictions and investor caution prior to the 19th Party Congress meetings in Beijing.
Development sites won out by a wide margin, recording a 58% share of Chinese outbound investment by asset category and raising the sector’s cumulative total to US$8.4 billion thus far in 2017, skyrocketing 234% y-o-y. At a 28% share (US$710 million), the office sector plunged 83% q-o-q to the lowest quarterly investment total in more than three years.
James Shepherd, Managing Director of Greater China Research, Cushman & Wakefield said: “In line with previous forecasts, overseas development sites have quickly emerged as the top asset category for Chinese investors. While the share of investment into this asset category has surged from as low as 10% to 58% since 2016, there has been a pronounced swing in the opposite direction for overseas office investments, whose share over the same period fell back from as high as 71% to 28%.”
Australia took first place by destination as investors targeted development sites in particular at a 63% share (US$783 million) by asset category. Development sites also accounted for the overwhelming share of investment into second-place U.K. and Hong Kong, which fell to third place. Canada (US$194 million) snuck into fourth place as investors deployed only US$192 million into the U.S., which dropped three places on the quarter.
Francis Li, Head of Investment & Advisory Services, Greater China, Cushman & Wakefield said: “Ahead, the outlook for Mainland Chinese participation in overseas real estate markets is quite uncertain over the short term and will be heavily reliant on Central government approvals of any proposed deals. Given the immense scale of Chinese property developers (5 of whom are now listed on the Global Fortune 500 list), it would seem that there is now, more than ever before, a compelling business case for a prudent re-balancing of their development portfolio with an allocation of funds to projects across global markets.”
To read the report, please click here.
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