China: foreign buyers’ interests increase

05/12/2018

 

The interests of foreign investors increase and reach 23 billion yuan in at least five publicly announced agreements

 

China is increasingly a country that attracts the attention of foreign capital. This is confirmed by the growing focus on Shanghai commercial furniture. Overseas investors’ share of commercial property deals in Beijing could rise to 40 per cent for 2018, a record high. In third quarter, overseas investors accounted for 66.5 per cent of commercial property deals in Shanghai.

Among the most important operations carried out by the operators are those of Beijing and Guangzhou, two in Shanghai and one on a portfolio of activities in five cities. These investors have spent more than 23 billion yuan (US$3.3 billion) in these five publicly announced deals involving commercial property in the past three weeks, even as local investors find themselves curtailed by Beijing’s credit tightening policy

 

In China as a whole, cross-border transactions stood at US$5 billion, or 22 per cent of the total

 

According to Grant Ji, head of CBRE North China’s capital markets, in Beijing, the share of overseas investors could rise to 40 per cent for 2018: “Local competitors’ hands are tied by tight financing conditions, stricter approval [processes] and property market curbs, while overseas investors have an edge, such as access to international funds and shorter procedures”.

The interests for Chinese properties continue to grow. A shopping centre worth 2.56 billion yuan in Beijing’s Tongzhou district was sold to Hong Kong-based Link Reit. Link Reit, which owns another mall in Beijing and could execute the transaction overseas, won out in the end because of its “deeper understanding of the property market, greater determination and the ability to close the transaction in a timely and simple manner”, said Ji.

Data from Cushman & Wakefield shows that in Shanghai, the share of overseas investors – mainly private equity firms from the United States and Hong Kong – surged to 66.5 per cent in the third quarter, its highest level since 2016

 

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