Chinese pour $13.5b into Australia
Chinese investment in Australia swelled to almost $13.5 billion last year and the money is expected to keep on coming, experts say.
Australia was one of the prime targets for Chinese investors in the first quarter of 2015, with more than a quarter of global Chinese investment finding its way here, according to a CBRE report.
Chinese investment in Australia has now surged by 1000% in the past four years, with around $1.35 billion invested in 2010.
The economics of residential development in some Australian cities, particularly Sydney and Melbourne, have improved, underpinning significant buyer interest in well located office assets suitable for residential use
Sydney and Melbourne have received the lion’s share of the attention this year, with investors continuing to target commercial development sites within a 5km radius of capital city CBDs.
Of the 116 sites sold within that zone across the country in the 12 months to April, 36 were bought by Chinese investors. Sixteen of those were in Sydney, 15 in Melbourne and five in Sydney.
Melbourne: Chinese investor snaps up Hare Krishna building
CBRE senior managing director of institutional investments, Rick Butler, says the strength of Australia’s residential market has made commercial property even more attractive to overseas buyers.
“The economics of residential development in some Australian cities, particularly Sydney and Melbourne, have improved, underpinning significant buyer interest in well located office assets suitable for residential use,” Butler says.
Commercial properties like this Melbourne retail outlet and Hare Krishna centre continue to be targets for overseas investors
Butler says he expects the international influx to continue for some time.
“In regard to existing office, retail and industrial investment assets, Chinese interest is definitely starting to strengthen, with both high net worth individuals and newly emerging insurance companies showing increasing interest.”
Chinese investors were the second largest purchasers of Australian commercial property between January 1 and March 31 this year, behind only Singapore and ahead of the United States.
CBRE Australia’s head of research, Stephen McNabb, says more attractive conditions for Chinese insurers, as well as increased numbers of Chinese tourists, students and residents were behind the boom.
“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 allocate into real estate for life insurers, rising from 10% to 30%, and offshore investment to a limit of 15% across all asset classes,” he says.
