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Asian cross-border spending on global property hits record


The distinctive skyline of Shanghai at sunrise. Toni Schmidt/Shutterstock

Property Report

Asian investors spent a record USD19.5 billion on inter-regional property investments in Q2 2017, up 71 percent year-on-year, Jones Lang LaSalle reported.

Despite a capital flight clampdown, China still led all Asian countries in cross-border spending, which totaled USD6.2 billion for the first six months of the year. "With the capital curbs making it harder to invest outside of China, domestic investors will aim to invest more inside the country," said David Green-Morgan, JLL's global capital markets research director.

"Domestic developers will become a new pool of buyers for existing assets as they seek to deploy excess capital. With rising prices in Tier 1 cities, investors are starting to look at Tier 2 cities in China for good retail and logistics assets, as well as those with potential for conversion, such as retail into office space, or hotels into serviced apartments."

Five of the biggest spenders globally were Asian: China, followed by Hong Kong, which sent out USD4.9 billion for real estate investments; Singapore, USD4.1 billion; South Korea, USD1.9 billion; and Japan, USD1.6 billion.

China took the third spot worldwide for most capital outflows on property, behind only Germany and the UK. Incidentally, the UK and Germany were the biggest recipients of Asian capital for property, drawing USD6 billion and USD2 billion, respectively. The US was still the most preferred destination for Asian capital exports, luring USD10 billion from the continent.

Office remains the top asset class worldwide, but investments in industrial asset are close behind, surging 28 percent on the year to USD24 billion. "There is huge demand for scale in the industrial and logistics sector globally," said David Green-Morgan. "The more mature markets, the US, UK, Germany, Canada and Japan, tend to offer that."

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