Australia a magnet for Chinese capital

Australia a magnet for Chinese capitalAustralia attracted over one-quarter of the Chinese capital that flowed into global real estate in Q1, 2015 – with Sydney and Melbourne the primary targets, according to a new report from CBRE.Chinese capital flows to global real estate surged from US$1 billion in 2010 to US$10 billion in 2014. According to CBRE’s ViewPoint report, Australia attracted 15 per cent of this investment in 2014 and over one-quarter of the US$4 billion invested in Q1 2015, with much of that capital flowing into the commercial property sector.In the period from January 1, 2014 to March 31, 2015 Chinese direct investors were the second largest purchasers of commercial property in Australia, after Singapore and ahead of the US. Chinese investors accounted for one-third – or AU$3 billion – of the AU$9 billion in foreign capital invested in commercial property assets nationally, with that momentum continuing to build.CBRE’s head of Research, Australian, Stephen McNabb commented; “Capital flows from China to Australia are complemented by growing numbers of Chinese tourists, students, settlers and an increased bi-lateral trade relationship. Australia competes for capital with other markets globally, however the aforementioned factors appear to provide a longer-term underpinning for the capital flow now being experienced.””Flows from China into global markets are expected to remain firm, with potential upside, as regulatory changes over the past three years have allowed a higher investment allocation into real estate for life insurers, rising from 10 per cent to 30 per cent, and offshore investment to a limit of 15 per cent across all asset classes,” McNabb said.He added that domestic economic and residential market risks in China had led investors and developers to diversify interests offshore into relatively safer markets.To read the report click here.