SHANGHAI--(BUSINESS WIRE)--Chinese outbound investment jumped to a record high of US$21.37 billion in 2015, as Mainland-based investors including banks, developers, insurance firms and sovereign wealth funds continued to snap up commercial properties around the world, according to a new report released today by DTZ/Cushman & Wakefield, a global leader in commercial real estate services.
The China Outbound Investment CapitalWatch report states that overseas commercial property investment by Mainland-based investors totaled US$21.37 billion in 2015, representing year-on-year growth of 41.5%, and over six times the 2010 total.
State-owned firms registered most of the year’s biggest outbound deals, as these investors tend to transact fewer but larger deals than their private-sector counterparts. In 2015, state-owned firms accounted for some 58.8% of the total outbound transaction value by known investors, but around 30.8% of the total number of transactions, while private investors made up the remainder.
Office remains the most popular asset class, accounting for 40% of total outbound capital in 2015. However, development sites took a sizeable 33% of investment volume, rising from about 26% in 2014. Malaysia tops the list for total investment in development sites, at US$2.52 billion, followed by Hong Kong, the U.S., Australia, and Singapore. Notable transactions of land sites included the US$1.75 billion purchase of the former site of the Royal Malaysian Air Force Base near Kuala Lumpur, and a series of development site deals by Mainland developers in Hong Kong. In fact, according to data from the Lands Department of Hong Kong, Mainland investors in 2015 accounted for 30% of land transactions in the city, but 55% of total land transfer fees.
The U.S. remains the premier magnet for capital flows from China (and around the world), taking approximately US$4.37 billion of Mainland Chinese investment in 2015.
Justina Fan, DTZ/Cushman & Wakefield's Head of Outbound Investment, Greater China and Executive Director, Capital Markets, Asia Pacific, commented: "The U.S. is still viewed as the safest of safe havens, and the combination of a strong dollar and weakening renminbi boosted the appeal of the U.S. for Chinese investors in the midst of economic headwinds and financial market volatility at home."
Hong Kong and Australia (driven by Sydney and Melbourne) followed closely behind in the ranking of global destinations. Malaysia was also popular, surpassing the UK in terms of investment from the Mainland. By region, Asia Pacific still absorbs the greatest amount of Chinese capital, totaling US$8.1 billion in 2015, a nearly three-fold increase compared to the previous year.
James Shepherd, Executive Director, International Advisory, Greater China at DTZ/Cushman & Wakefield, said: "Continued fluctuation of the renminbi exchange rate will remain one of the primary macroeconomic risk factors for cross-border investors in 2016, prompting Chinese investors looking overseas to carefully develop risk mitigation strategies. There is also evidence to suggest that China's authorities are tightening controls on capital outflows, which may have a dampening impact on outbound real estate investment this year, although investor appetite is likely to remain strong."
The successful merger of Cushman & Wakefield and DTZ closed September 1, 2015. The firm now operates under the iconic Cushman & Wakefield brand and has a new visual identity and logo that position the firm for the future and reflect its trusted global legacy and wider history. The new Cushman & Wakefield is led by Chairman & Chief Executive Officer Brett White and Global President Tod Lickerman. The company is majority owned by an investor group led by TPG, PAG, and OTPP.
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Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. In Greater China, the firm has a co-branded presence under the name of DTZ/Cushman & Wakefield and operates 20 offices in the region. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of US$5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project management, tenant representation and valuation & advisory. To learn more, please visit www.dtzcushwake.com or follow us on WeChat (DTZ_China) and LinkedIn (https://www.linkedin.com/company/dtz-cushman-wakefield).