Real estate company Knight Frank has published its second China Outbound Real Estate Investment report. By the end of 2015, the total outbound capital reached nearly $30 billion, doubling that of 2014.
As domestic market uncertainties persist, Chinese outbound real estate investments continued to grow strongly in 2015. Global gateways continue to attract the bulk of this investment. By the end of 2015, the total Chinese outbound capital has reached nearly $30 billion, doubling that of 2014.
Domestic Market Woes
The recent renminbi devaluation and stock market turbulence have contributed to the market uncertainty and increased investors’ wariness of further policy intervention.
This underscores the need for diversification for Chinese investors, particularly to overseas markets. Against this backdrop, there were some predictions of a retrenchment of Chinese outbound investment, which did not come to fruition.
Key trends of Chinese outbound investment
Despite domestic market uncertainties, Chinese real estate investment overseas has continued to grow strongly in 2015, riding on the strong appetite for overseas real estate from both major and smaller investors. This trend is also supported by the growing need for diversification from the Chinese market.
In 2015, there are significantly more Chinese developers investing overseas, reflecting their need on for investment diversification.
«The traditional gateways are still the preferred destinations for Chinese investment,» said Paul Hart, Executive Director, Greater China at Knight Frank.
Top Three Destinations
Manhattan, New York was the top investment destination in 2015 having attracted $5.78 billion of investment, a fivefold increase. This was followed by Sydney and Melbourne in second place in 2015, attracting a total of $3.8 billion of Chinese investment. London was in third place mirroring the momentum of previous years.
In the US, the majority of the Chinese capital flows were into hotel and office properties in the New York borough of Manhattan, accounting for 52.3 percent of the total investment in the country. David Ji, Director and Head of Research and Consultancy, believes that, in contrast to some predictions, the growth of Chinese outbound in 2016 will be strong despite the ups and downs of the domestic economy.
