Investors are allocating more capital to real estate worldwide, with Asian investors now accounting for five of the 10 biggest cross-border spenders.
Inter-regional investment reached US$19.5 billion in Q2 2017, up 71 per cent from the same period last year.
Globally, China was the third biggest source of cross-border capital into real estate in the first half of the year at US$6.2 billion, behind Germany and the UK. After China, Asia’s biggest spenders were Hong Kong (US$4.9 billion), Singapore (US$4.1 billion), South Korea (US$1.9 billion) and Japan (US$1.6 billion).
Almost all of their capital targeted the world’s three largest and most liquid real estate markets, with the US receiving US$10 billion, the UK pocketing US$6 billion, and Germany US$2 billion.
China star performer in the region
In what could be the biggest single asset deal of the year, Chinese conglomerate HNA acquired 245 Park Avenue, a Midtown office tower, for US$2.21 billion in May.
“The purchase underscores the continued prominence of Chinese capital in global real estate markets despite capital controls,” adds Mr Green-Morgan. “Given this is the first wave of Chinese capital going global, it remains concentrated on the biggest, most liquid markets in the world.”
While Asian investors are looking overseas, they also continue to hunt for deals closer to home, with continued interest in office and logistics assets across the region. Domestic investments amounted to US$49 billion in Asia Pacific in Q2.
Domestic demand continues to drive the Chinese real estate market in particular, but foreign buyer interest is on the rise, accounting for a third of total transaction volumes in Q2.
“With the capital curbs making it harder to invest outside of China, domestic investors…
