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News Release

Shanghai

London proves to be the biggest magnet for Chinese commercial and residential investors in 1H 2014      


Shanghai,29 July 2014   - London has proved to be the most popular destination for Chinese investors in 1H 2014 as efforts by the city's government to attract more mainland China capital into major infrastructure projects has spilled into residential and commercial markets.

Overall Chinese outbound investment is 17% higher in the first half of 2014 than over the same period of 2013 at US$5.4 billion.  Commercial investment has taken the lions share at almost US$4 billion, but the growth has come from residential investment which is 84% higher than last year at US$1.5 billion.

In the second quarter the stand out deals were shared between London and San Francisco.  Institutional investors targeted London with China Construction Bank, China Overseas Holdings and China Life all buying core CBD office assets.  In San Francisco it was also CBD office assets that are in vogue but this time it was a private investor who snapped up the 225 Bush Street asset.

David Green-Morgan, Global Capital Markets Research Director at JLL, said: "Although the Chinese investors have been very active in the world's major cities in the first half of 2014, we are seeing them energetically pursuing opportunities right across the spectrum of geographies and sectors.  For first time overseas investors it makes sense to target the most liquid cities, but for the more experienced, looking at smaller less liquid markets like Spain where yields are higher but so are the risks, it is a natural progression."

Dalian Wanda became one of the first Chinese investors into the Spanish market this quarter with a purchase of an office asset in Madrid from the Santander Banking Group.  The introduction of the Golden Visa in many Southern European counties has also raised the profile of these locations amongst Chinese mainland investors.

Top Cities Attracting Chinese Investment into Real Estate, 1H14 (US$5m+)

CityInvestment Volume from China (USD million)
London2,311
San Francisco548
Chicago465
Sydney390
Madrid361
Melbourne191
Los Angeles169

Source: JLL

Darren Xia, Director of International Capital Group (ICG) at JLL China, noted: "We are definitely seeing an increase in Chinese capital moving overseas with the interest mainly focused in core office and mixed use development projects in global gateway cities such as London, New York, Sydney and San Francisco.  Developers and insurance companies remain the most active investor groups with a notable increase in interest for hotel and hospitality products in hot Chinese tourist destinations.  London remains the leading destination for Chinese capital, with its profile having been reinforced recently by visits to China by the Mayor of London Boris Johnston's office which JLL helped to coordinate by organizing several high level meetings with top Chinese developers and investors."

"Given the continued rise in Chinese outbound investment over the first half of the year and the pipeline of groups looking to invest outside of China, then full year 2014 outbound investment should easily eclipse the 2013 level of US$11 billion," noted David.

London 1.jpg 

London Deputy Mayor – Edward Lister visited JLL Shenzhen Office

 London 2.jpg

Edward Lister shakes hands with Edward Xia, Managing Director for JLL Shenzhen 

Notes

Numbers in this release refer to the purchase of individual commercial property assets or portfolio of assets.

Including:

  • All transactions over US$ 5m
  • Sectors covered are office, retail, hotels, industrial, mixed-use and 'other' (includes nursing homes, student accommodation, etc)
  • Residential development sites

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