US$69MIL to US$16BN In 5 Years
The total value of outbound real estate investment by Chinese mainland has continued to grow from around US$69 million in 2008 to above US$16 billion in 2013, a white paper released yesterday by the international real estate services provider said. This growth is nothing short of astonishing and these are still early days!
What accounts for the sudden and rapid growth? It is the diversification policy pursued by China. The primary reason has been the Central Government driving policies to go global and go aboard.
In 2011, Wen Jiabao said
"We will accelerate the implementation of the 'go abroad' strategy.....to invest overseas." (Wen Jiabao)
Quoting from the report, Wen's comment reflected the Chinese Government's new enthusiasm for outbound investment. Green light given - Go!
Given the expected further appreciation of the yuan and the sustained growth of demand for real estate with attractive yields, Chinese investment in overseas property will likely double in 2014. Colliers noted that higher returns, diversification and the opportunity to create an international image have driven them to invest overseas.
Chinese investors are now increasingly beginning to switch from residential investments to commercial real estate. Here are some investment projects that the Chinese have taken part in. I am sure there are many more to come.
The most popular targets of outbound Chinese capital in the last five years have been London, New York, San Francisco, Los Angeles, Sydney and Melbourne.
Colliers predicted the next wave of outbound investment will have a bigger focus within gateway cities or even going to cities near the main gateways such as Seattle, Boston, Munich, Paris and Brisbane.
All this money flowing out from China will certainly shake up the global real estate market. With London's pole position in Europe, we can expect Chinese investors to keep up their investments in London. As they gain greater confidence, they may even start to invest outside London, in broader UK.
Let's welcome the big Panda!
Happy Investing!
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