Slowdown won’t put brakes on Chinese investment

Chinese property investment in Australia is continuing apace despite sharemarket volatility and a weakening yuan, but a dearth of large-scale sites on the market could keep a lid on turnover activity.

Chinese commercial property buyers funnelled more than $3.8 billion into Australian property throughout 2015, placing Sydney and Melbourne second only to Manhattan as the world’s top destinations for Chinese property investment.

Knight Frank analysts predict inflows will continue at the same pace during the current calendar year, but note an absence of large-scale sites and portfolios on the market means total investment won’t beat the previous year’s record.

“We anticipate that the outflow of Chinese investment into Australia will remain at steady and strong levels but it will be difficult to beat 2015,” Knight Frank director Dominic Ong says, noting that CIC’s purchase of the Investa portfolio added $2.45 billion to the total.

“I expect demand will be strong for the next three to five years, but what might affect the transaction volume will be supply — the lack of prime stock available.”

YT International bought two buildings at the Forrest Centre in Perth. Picture: Forrest Centre.

Chinese investors have already emerged as the keenest pursuers of commercial property throughout the first two months of the year, with groups including Macrolink, SHL Properties, YT International and VIG leading the way.

YT International emerged this week with a prime slab within the Insurance Commission of Western Australia’s property portfolio, landing two buildings at Perth’s Forrest Centre for a price believed to be about $220 million.

“Some positive macro-economic developments come at the right time, when Sino-Australian relations are at their warmest in history,” Knight Frank analysts said, pointing at the China-Australia free trade agreement.

This article originally appeared on www.theaustralian.com.au/property.