Why China is investing in the west, and where the money is going


Chinese real estate transaction volume in western markets reached $30 billion in 2015—double the amount seen in 2014, according to property consultancy firm Knight Frank’s latest research. Notably, as Paul Hart, executive director of Greater China at Knight Frank, told Forbes, gateway cities like Manhattan, London, Sydney and Melbourne account for more than 40 percent of last year’s China-based transactions.

While major developers, insurers and sovereign wealth funds have traditionally been the major players in large-scale international real estate deals, China is now seeing an increase of developers and insurance companies looking to buy. A full 14 out of the top 20 offshore investors last year were developers, up from ten in the previous year, and six were insurance companies, up from four in 2015.

“Now insurers dominate purchasing in the six of the top ten deals [done around the world],” Hart told Forbes, citing high-profile purchases by Anbang Insurance, including New York City's Waldorf Astoria Hotel for $1.95 billion; Heron Tower in London for $1.172 billion plus its $414 million purchase of Merrily Lynch Financial Center in Manhattan. In the same year, Taiping Life Insurance bought luxury apartments on 111 Murray Street for $820 million. 

Virtual Event

HOTEL OPTIMIZATION PART 2 | Now Available On-Demand

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.

And with China's domestic economy experiencing instability, international markets may be the safest option for large-scale investments. David Ji, director and head of research and consultancy at Knight Frank, told Forbes that Chinese initiatives like the One Belt One Road project, the Asian Infrastructure Investment Bank and others seem likely encourage outbound investment. 

Source: Forbes

Suggested Articles

A new entity will combine a number of brands, including Hoxton, Gleneagles, Delano, SLS, Mondrian, SO/, Hyde, Mama Shelter, 25h and 21c Museum Hotels.

Service Properties Trust, Host Hotels & Resorts, Caesars Entertainment and Vici Properties have completed multimillion-dollar hotel deals.

Serving as an attractive alternative to traditional financing arrangements, hotel sale-leasebacks may offer a solution for many businesses.