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Chinese overseas real estate investment hit new record of US$33 billion in 2016

Hotel and industrial sectors saw biggest rise in investment


SINGAPORE, 23 JANUARY 2017 - China has hit a record of US$33 billion in overseas commercial and residential property investment in 2016, an increase of nearly 53 percent year-on-year, according to the latest data from JLL's Global Capital Flows.

While investment in land, offices and hotels account for 90 percent of all Chinese outbound capital in the last three years, the hotel and industrial sectors showed the largest increase in 2016 due to significant transactions in the U.S. in the form of portfolio sales and Chinese appetite for industrial parks.

"Hotel activity last year was boosted by the purchase of Strategic Hotels and Resorts by Anbang Insurance for over US$6 billion," says David Green-Morgan, JLL's Global Capital Markets Research Director. "China Life Insurance has secured assets across the hotel and office sectors with portfolio purchases from the Starwood Capital Group and an office tower in Manhattan; sovereign wealth fund Chinese Investment Corporation has been active in the office sector in New York as well."

Land acquisitions by Chinese investors made a comeback last year, with a rise of 44 percent following significant transactions in Hong Kong, Australia and Malaysia.

"We do believe that Chinese investors will continue to be major movers of capital into global real estate for many years to come," says Green-Morgan. "But a similar increase in 2017 may be challenging given the recent discussion about China monitoring its capital outflows."

Overseas investment aside, Chinese investors further deepened their investment domestically. They accounted for more than 86 percent of transactions in China in 2016, up from about 75 percent in the past few years.

The tier 1 cities were most attractive to these investors, according to Johnny Shao, Head of Capital Markets for Shanghai and East China, JLL.

"Total transaction volumes in Shanghai reached US$14 billion, accounting for 48 percent of China's total investment volume. Beijing was the runner-up, accounting for 16 percent of all the transaction volume in 2016, while Shenzhen came in third, reaching 10 percent of the total," says Mr Shao.

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About JLL

JLL (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.  JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and a global workforce of more than 70,000.  On behalf of its clients, the company provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.

JLL has over 50 years of experience in Asia Pacific, with 36,000 employees operating in 94 offices in 16 countries across the region. The firm won 15 awards at the International Property Awards Asia Pacific in 2016 and was named number one real estate investment advisory firm in Asia Pacific for the fifth consecutive year by Real Capital Analytics.  www.ap.jll.com.