China third quarter overseas property investment down 51 per cent, year on year

Chinese outbound property investment fell 51 per cent to $US2.5 billion ($3.26 billion) in the third quarter from a year ago, a private sector survey of deals showed on Thursday, the lowest in 14 quarters as Beijing tightened its grip on overseas investment.

In the January to September period, total Chinese outbound real estate transactions amounted to $US18.2 billion, consultancy Cushman & Wakefield said in a report on Thursday, only half the full year volume seen in 2016.

The firm also attributed the weaker volumes to investor caution ahead of the Party Congress held in October. However, it added there are some major transactions in the pipeline, which could boost the 2017 figure.

“Were these to close before the end of 2017, then the year’s total may still yet be on par with, or close to, 2016’s record breaking haul of a mammoth $US38.3 billion,” it said.

During the third quarter, 58 per cent of outbound investments went to development sites, which remain the most popular asset category for Chinese investors this year, while 28 per cent went to the office sector.

Despite its relatively high share, investment into the office sector, at around $US700 million, was the lowest quarterly volume in more than three years.

Australia was the most popular investment destination at $US783 million, followed by the U.K and Hong Kong at $US634 million and $US560 million, respectively.

“Many Chinese investors have adopted a wait-and-see approach during this period of uncertainty. Nevertheless, many would-be investors are keeping fully informed about markets of interest, and in particular we note a research enquiry spike in relation to U.K. and U.S. office markets,” the consultancy firm said.

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“There seems little doubt that, in the face of stiff controls, pent-up demand is now building quickly for overseas real estate investment.”

This story was first published by Reuters.