According to latest press release of CBRE Vietnam, Asian outbound real estate investment was dominated by Chinese investors in 2016, accounting for nearly half of total investment—with 47% (US$28.2 billion).
“Chinese investors remain active in deploying capital offshore into global real estate assets. Despite recent policies by the government restricting Chinese outbound investment, there continues to be a steady flow of Chinese capital overseas as investors seek to diversify their portfolios,” said Yvonne Siew, Executive Director, CBRE Global Capital Markets.
“With more scrutiny on cross-border capital flows and rigorous checks by the government which may lengthen the approval process, Chinese outbound real estate investment may moderate, gathering at a more sustainable rate. Instead of larger transactions, Chinese investors may simply opt for a higher number of smaller deals. 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,” added Ms Siew.
For the second consecutive year, CBRE figures also reveal that the US remained the most favored destination for Asian capital, drawing 43% of the overall total, followed by EMEA as the second-favored at 27%. Asia—with figures showing an increase of intra-regional activity this year—comprised 23% of overall investment turnover, up from 21% in 2015, which shows that Asian investors favored to keep more capital within their own region.
New York surpassed London as the top metropolitan destination for outbound investment in 2016, however, it contributed to a smaller share compared to 2015. The total top five destinations—New York, London, Hong Kong, Seoul and Sydney—contributed to 37% of the overall total, a decrease from 42% y-o-y, revealing that investment was spread across more diverse destinations.
“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. Places in Continental Europe such as France and the Netherlands; Chicago, San Francisco and Washington in the US; and Vancouver in Canada, are now on more investor radar screens,” commented Robert Fong, Director of Research, CBRE Asia Pacific.
The office sector remained the most-preferred asset class for Asian investors, accounting for half of overall investment. Gateway cities of London, New York and Hong Kong were the top three destinations for office investment. Meanwhile, the hotel sector garnered more interest with US hotel assets attracting significant international investment—the biggest transaction of the year was a hotel acquisition in the US by a Chinese investor.