GLOBAL – The European Public Real Estate Association (EPRA) is opening an office in Hong Kong in a bid to attract some of the huge pool of Chinese investment capital soon expected to flow into the international property markets.

Philip Charls, chief executive, said: "Asia generally, and China in particular, are rapidly evolving from being a major centre of manufacturing exports to the world to also being a key source of exported capital for international investment."
The association told members at its annual conference in Paris that it has appointed Yuri Zhou as Asian investor outreach manager to open its office in Hong Kong.

Yuri, who was previously a senior equity research associate in Hong Kong and Chinese property for Citi Research, will first focus on promoting the European listed property industry in mainland China, Hong Kong, Korea, Taiwan and Singapore initially, EPRA said.

The Chinese insurance sector would be an early priority, it said, holding RMB7.4trn (€900bn) of assets.

These investors are, the association said, increasingly looking for income yield and capital appreciation from real estate in Europe.

The first capital flows into international property markets are now starting to happen, it said, resulting from new rules in China last year removing some restrictions on investments.

As things stand, only 1% of total Chinese insurance assets are invested overseas across different investment classes, it said.

While the new rules mean overseas investments will remain capped at 15% of insurers' total assets, the proportion of this that can now be invested in infrastructure and real estate has doubled to 20% from 10%.

Chinese insurance companies are allowed to authorise domestic asset managers or issue mandates to global fund managers, providing they meet certain requirements from the Chinese Insurance Regulatory Commission, EPRA said.

The companies can now invest in 45 countries and regions, whereas before, Hong Kong was the only authorised market for their overseas investment, it said.

Yuri said attributes of European real estate equities that could attract Asian investors included income yield, liquidity, transparency and good corporate governance.