China overtakes Australia as top destination in Asia-Pacific for foreign commercial property investors, CBRE survey finds

By Lam Ka-sing / | May 6, 2019 3:52 PM SGT
China has overtaken Australia as the top destination in Asia-Pacific for cross-border investments in commercial property for the first time, with Shanghai the preferred city for overseas buyers, according to a survey by CBRE.
About a quarter, or 25.8 per cent, of the 348 global real estate investors polled between November and January said they were interested in China, up 3.7 percentage points from a year ago.
The office segment remained the most popular sector, with more than a third of respondents expressing an interest.
China is 4.7 percentage points ahead of Australia, last year's leader, which ranked second in the study. And it surged further ahead of third-placed Japan, opening up a 7.5 percentage point lead having narrowly overtaken it last year.
"China's sustained mid- to high-speed economic growth, the increasing importance of China asset allocation in investment portfolios, and a more mature investment market are key factors fuelling the robust influx of foreign capital into China's commercial real estate," said Alan Li, president of CBRE China. "We believe China's en-bloc market activity will continue to be buoyant this year."
En-bloc refers to transactions where a whole building changes hands.
In the first quarter of this year, foreign investors accounted for about half of the 53 billion yuan (US$7.88 billion) of China's en-bloc deal volume, according to CBRE.
For instance, Brookfield Asset Management bought the mixed-use Greenland Huangpu Centre in Shanghai from Greenland Hong Kong Holdings for about 10.6 billion yuan this month.
The moderation would come despite fiscal and monetary policy support to increase liquidity and maintain stable funding supply in the banking system, Moody's said.
Exactly a third of Chinese investors identified potential economic shocks as the biggest threat to their real estate investment, up 3 percentage points from last year.
The expectation for capital value growth also weakened by 2 percentage points compared to last year.
The survey found that eight in 10 Chinese developers would be willing to sell this year,...