Chinese capital dominates Asian outflows in first half of 2016 – CBRE

China has been the biggest source of outbound Asian real estate capital this year, according to CBRE.

Investors from the country accounted for 60%, or $16.1bn (€14.2bn), of total Asian outbound investment in the first half of 2016 – more than double the same period last year.

The US remained the favoured target for Asian investors, attracting 52% of the total. New York overtook London as the top destination.

“Asian capital, particularly Chinese, continues to display strong investment appetite in overseas markets, especially in global gateway cities, with the US remaining the stand-out target market,” said Ada Choi, senior director of research, CBRE Asia Pacific.

“With the recovery of the US economy and its solid real estate fundamentals, Asian investors are focused on capitalising on US assets.

“Concerns over the market slowdown in their home market have led Chinese investors to seek a safer investment environment which offer higher potential returns.” 

CBRE said it found strong intra-regional activity within Asia as investors from the region diversified domestic market risks and sought higher returns.

Chinese conglomerates were active in Hong Kong and Japan, while Singaporean investors remained active in southeast Asian markets.

Insurance firms were the most active source of Chinese outbound capital, accounting for 50%, followed by conglomerates (23%), developers (10%) and sovereign wealth funds (9%).

“Chinese insurance investors led outbound investment among the different investor types as they increasingly seek to diversify their overseas portfolios,” said Choi.

“Conglomerates and sovereign wealth funds also remain active and play a significant role in outbound investment since there is a huge supply of investible capital in China.”

Choi said the momentum of outbound investment will continue to be strong during the rest of 2016, with pipeline deals expected to be completed.

Offices remained the preferred asset class for Asian investors, accounting for nearly half of overall investment at 47%.

Hotel properties continued to receive strong interest from Chinese investors, being the second most-traded asset with 33% of overall investment.