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Chinese outbound investment into commercial real estate hits record USD7.6bn in 2013, up 124% on 2012

  • ​​​U.K. and U.S. markets attracted most capital in 2013
  • Preferred markets in Asia Pacific were Singapore and Australia 
  • New York and London top two cities globally for Chinese money 
  • JLL forecasts Chinese money into overseas commercial real estate could pass USD10 billion in 2014
SINGAPORE & SHANGHAI, 23 January 2013 – New research from Jones Lang LaSalle (NYSE:JLL) shows that Chinese outbound investment into commercial real estate has increased by 124 percent to USD7.6 billion in 2013. This compares to USD3.3bn in 2012 and USD2.9bn in 2011.

The UK and the US real estate markets attracted most of this capital from China in 2013; the UK with USD2.3 billion (up from USD1.3 billion in 2012) and the US with USD3.1 billion (up from USD264 million in 2012).  In Asia Pacific Chinese money focused on Australia and Singapore, which attracted USD700 million and USD1 billion respectively. In 2012 Australia attracted USD209 million from China; whilst Singapore did not see any investment from China. 

Alistair Meadows, Director and Head of JLL’s International Capital Group in Asia Pacific said: “The initial catalyst for this dramatic rise in outbound investment has been the introduction of the ‘Go Global’ policy by the Chinese government. This relaxation of government policy has enabled and encouraged outbound investment across all sectors of the economy. As a consequence, insurance groups, developers, and ultra-high net worth individuals (UHNWs), have increasing sought to diversify their real estate portfolios internationally in the last 12-18 months. This is a long term structural shift where Chinese capital will become a permanent and growing feature of the global real estate markets.” 

New York and London top the cities which attracted the most money from China into commercial real estate; Chinese investors spent USD2.9 billion in New York, representing a considerable increase on 2012 when they spent USD200 million in the city. London has for some time been a city of choice for overseas investors, including Chinese, and in 2013 attracted USD2.1 billion from China.

David Green-Morgan, Global Capital Markets Research Director at JLL commented: “Although individual large transactions can account for a large proportion of investment in a city, for example the GM Building and One Chase Manhattan Plaza in New York, or the Grand Orchard Hotel in Singapore, we are seeing a definite increase in interest in overseas markets from Chinese investors. Though they typically prefer large assets in the dominant, established transparent and liquid markets, such as New York and London, we are also seeing interest in other markets for example Manchester in the UK.” 

Top Cities attracting Chinese investment into commercial real estate, 2013

CityInvestment volume from China (USD million)
New York, U.S.2,936
Greater London, UK2,154
Sydney, Australia423
Manchester, UK245
Hong Kong220

Source: Jones Lang LaSalle

The office sector continues to dominate as the preferred asset class amongst Chinese commercial real estate investors that are active overseas, accounting for 85 percent of all transactions they made in 2013. However, there is an increasing interest in retail and hotels, as well as residential land development, as demonstrated by Greenland's recent purchase of the Ram Brewery site in London and Dalian Wanda's decision to build a hotel and residential complex at Nine Elms in London.

Alistair Meadows added: "We expect interest and activity from equity rich Chinese buyers in overseas real estate markets to continue to grow in 2014; we think it is possible that the total volume of spend by Chinese investors on commercial real estate outside of China could pass the USD10 billion mark in 2014."

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About Jones Lang LaSalle 
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. 

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 26, 700 employees operating in 80 offices in 14 countries across the region. The firm was named ‘Best Property Consultancy’ in three Asia Pacific countries at the International Property Awards Asia Pacific 2013, and won nine Asia Pacific awards in the Euromoney Real Estate Awards 2013.  

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