Chinese Investors Eyeing US Real Estate Bargains

The Chinese banks are currently standing on a mountain of cash, and investors want to take advantage of historically low prices is some US markets. However, Chinese regulation …

The Chinese banks are currently standing on a mountain of cash, and investors want to take advantage of historically low prices is some US markets. However, Chinese regulation on overseas investment may play a role in limiting this type of investment. For more on this, see the following article from Property Wire.

As the property market recovery gets under way in China developers are looking for cheap residential land in Australia and the US, it is claimed.

Land in both nations has become very cheap as few Australian and American developers have the finance in place because of tight lending criteria, according to the new Asian head for real estate firm CB Richard Ellis.

Residential land sites in Australia, particularly in Queensland, have been severely discounted as owners want to sell rather than pay holding costs while they wait for the market to rebound.

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Chris Brooke, president and chief executive of CBRE’s new Asian unit believes that Chinese developers would start buying soon as the Chinese government recently relaxed overseas investment laws, making it easier for Chinese companies to invest offshore.

Brooke said the biggest bargains are perceived to be in the US which has one of the hardest hit real estate markets. And even although there are signs that the housing market in Australia is recovering, big firms want to get in before land prices start rising.

‘Chinese banks have high liquidity. We are working with a number of Chinese developers looking to get into offshore residential developments,’ he said. He added that he expected the trend to increase into 2010.

Brooke also said that large Asian corporations and institutions were expected to make commercial property acquisitions in Australia in the next 12 months. Stimulus packages handed out by Asian governments would underpin offshore investment, he explained.

‘There is a lot of investment at the moment from a variety of Asian institutions. Some are new players including a number from Singapore,’ he added.

An example is Singapore’s sovereign wealth fund, the Government Investment Corporation that recently ran the numbers on a half stake in the $485 million Sydney office tower, 1 Martin Place, owned by two Macquarie Group property funds.

Other buyers included private investors from Malaysia, Indonesia and Hong Kong. ‘Most are out of Singapore. There are not many from China, but China Investment Corporation has recently had injected $200 million into the troubled Goodman Group,’ he added.

The Korea Investment Corporation was also looking for acquisition opportunities, Brooke said. Last month Woori Investment and Securities, an arm of South Korea’s largest financial company, had looked at Investa Property Group-owned office towers in Sydney and Melbourne for about $600 million.

This article has been republished from Property Wire. You can also view this article at
Property Wire, an international real estate news site.

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