Chinese insurers poised for office grab

Chinese insurance companies will be the next big buyers in Australia’s commercial property market, an expert says.

Colliers national head of research Nerida Conisbee says an influx of Chinese insurers is imminent, with some expected to begin buying properties within the next year.

Of China’s major insurers, only the Sunshine Insurance Group has invested in Australian property so far, buying Sydney’s Sheraton on the Park hotel (above) for $463 million in late 2014.

“The Chinese insurers aren’t here yet. We caught up with a few of them earlier in the month and they think they’re probably about 12 months away from entering the Australian market,” Conisbee says.

That strength of Asian money just doesn’t seem to be abating, particularly the Chinese money

“That’s another huge amount of money that will potentially enter the market.”

Conisbee says the insurers will be seeking properties in which to base their businesses, rather than development opportunities.

“They’re not looking for development sites, they’re looking for more core property. The things that they’ll buy are a little bit different from the Chinese developers.”

Despite the Chinese economy beginning to slow, Conisbee says Australia can expect money to continue to flow into commercial property from overseas.

“That strength of Asian money just doesn’t seem to be abating, particularly the Chinese money,” she says.

“If the economy in China slows down that possibly will give them more impetus to expand more aggressively offshore.”

“The prices that they’re paying are well above what many local groups can pay, so it’s really changing that dynamic.”