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China's Appetite for Offshore Prime Property Booming
Brief:China's investment in commercial property offshore is on track to hit a fresh record in 2013, with investors most active in Europe, the U.S., Australia and Singapore.
China's investment in commercial property offshore is on track to hit a fresh record in 2013, with investors most active in Europe, the U.S., Australia and Singapore, according to an industry report.

Outbound real estate investment exceeded $5 billion as of the third quarter, already surpassing the previous record of $4 billion in 2012, Jones Lang La Salle said in a report.

This year, several mainland companies have made headlines with their purchases of landmark buildings in world class cities including New York and London, a reflection of China's growing appetite for prime real estate overseas.

In October, for example, China's largest private conglomerate Fosun snapped up a 60-story skyscraper, One Chase Manhattan Plaza, located in New York's financial district from JPMorgan Chase for $725 million.

"So far, Chinese outbound investment has mainly focused on the world's global cities and gateway markets such as Ping An in London, Greenland in New York and Bright Ruby in Singapore," said Darren Xia, director, International Capital Group, Jones Lang LaSalle China.

"However, Chinese investors have diverse interests and don't act as a single, unified group. Although sovereign capital and insurance companies have been the most active, we have also seen offshore investment increase from developers, conglomerates and private investors, all of which have different perspectives and objectives," said Xia.

 According to the company, interest in Europe has increased notably, with transaction volumes up 25 percent year-on-year to almost $2 billion so far this year.The U.K. remains the most sought after market in Europe as core residential and office assets in Central London remain popular with investors looking for high yields.

 In Asia-Pacific, Australia and Singapore are hot spots for Chinese investment. Investment in Australian commercial property is up almost 100 percent year-on-year at $500 million, according to the firm.

Meanwhile, in Singapore, Chinese investment group Bright Ruby made history with its near-$1 billion purchase of a mixed use hotel and retail development - the city state's largest-ever single commercial property transaction.

CNBC

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