Little change seen in China's outbound property investment in 2019 - consultancy

Little change seen in China's outbound property investment in 2019 - consultancy
By Reuters

HONGKONG (Reuters) – China’s property investment overseas is expected to be little changed this year at $10-$20 billion (£7.7 billion-£15.3 billion), after volumes dropped 63 percent in 2018 in response to tighter financing conditions, according to a survey by real estate consultancy Cushman & Wakefield.

Chinese real estate investment overseas hit a four-year low at $15.7 billion last year, while investors disposed over $12 billion of overseas assets, data from Real Capital Analytics showed.

Chinese regulators have been clamping down on speculative overseas deals for the last few years as part of efforts to staunch capital outflows and keep debt risks under control.

According to Cushman & Wakefield’s survey of 51 Chinese investors, 69 percent said they did not expect policy restrictions related to overseas property investment to ease in 2019, while 59 percent did not agree the domestic real estate lending environment would improve.

The survey was conducted in the fourth quarter last year and the results were released on Sunday.

The consultancy expected capital flows from China would continue to be restricted, irrespective of geographic location.

In terms of investment destinations, 35 percent of respondents said they plan to invest in the United States in 2019, and 27 percent in countries which are involved in China’s flagship Belt and Road (BRI) initiative which envisions linking Asian markets to Europe.

The UK and Australia followed at 24 percent each. Respondents were allowed to pick multiple potential locations.

Chinese investors in overseas real estate “are becoming more prudent and selective under the guidance of the government investment policies,” said Jason Zhang, Head of China Outbound Investment & Advisory Services of Cushman & Wakefield.

(Reporting by Clare Jim; Editing by Kim Coghill)

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