China Special Report - An Expanding Horizon - Chinese Capital Tapping into Overseas Real Estate Markets July 2013
- The recent trend of Chinese capital tapping into overseas real estate markets has been driven by several factors including limited investment channels in China, abundant liquidity, RMB appreciation and the relatively lower valuation of overseas assets in the years following the 2008 financial crisis.
- Individual investors from China have actively extended their primary objectives of overseas real estate investment from immigration and the education of their children to wealth preservation and creation.
- Well-capitalized Chinese Sovereign Wealth Funds have initiated allocation of significant capital to real estate investment in their attempt to generate both capital gains and long-term stable rental income from undervalued core property assets overseas.
- Domestic insurance institutions possess abundant low cost and long-term capital and have been permitted to invest overseas as well as conduct direct real estate investments since late 2012. We therefore anticipate Chinese insurance companies to emerge as a major new buying force in overseas real estate markets in the near term.