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News Release

China

JLL: 2014 sees 46% increase in Chinese outbound capital

Outbound investments beating domestic spending on commercial real estate for the first time


​​​China, January 27, 2015 – Chinese outbound capital has surged to over US$16.5 billion in 2014 as institutions, developers and private investors are taking advantage of the buoyant global real estate market.

  • An increase of 46% over 2013
  • Outbound real estate investments surpass domestic investments for the first time within commercial sector
  • Australia beats US as second favourite investment destination

In 2014, Chinese real estate investors purchased a record amount of US$16.5 billion in overseas markets, an increase of 46% over 2013. Commercial real estate led the growth and investments increased by almost 50% to over US$11.2 billion during the year. Existing office and hotel assets emerged as the favourites among Chinese outbound investments. Residential developers increased their outbound allocations to over US$5.3 billion, a 38% increase on 2013. The surge in outbound investment lifts China into the top five major cross border capital sources worldwide.

For the first time ever, Chinese buyers have spent more on commercial real estate outside of China than domestically in 2014, a significant milestone and a sign that the domestic market is entering a new phase. Following a slower year for transactional activity in China in 2014, outbound investments made up 52% of all real estate transactions of Chinese investors within the commercial sector. Office and residential land acquisitions accounted for 85% of all Chinese purchasing activity, although JLL also sees strong demand for hotel and hospitality assets.

2014 was marked by global diversification of Chinese outbound investments, with investors looking beyond Asia for suitable assets. While Europe topped the list of favourite investment destinations, attracting over US$5.5 billion, Australia emerged as a new favourite among Chinese investors in 2014 with over US$3 billion flowing into the country. US$2.5 billion was allocated to the Americas.

In terms of cities, Sydney received the bulk of investments down under with US$2.2 billion. It has established itself as one of the favourite destinations for Chinese investors on rank 2 of favourite cities, second only to London, which again topped the list and attracted US$4 billion in 2014. New York, San Francisco, Los Angeles, Chicago, Melbourne, Tokyo and Singapore all recorded significant Chinese investment between US$0.5 billion and US$1.5 billion.

Darren Xia, head of International Capital Group, China  

"Chinese real estate investors used 2014 to strategically internationalize their investment portfolios. At a time when macro concerns around developers and residential prices dampened the market, diversification in international markets allow Chinese investors to continue to grow sustainably and ensure long-term returns. Notably, activity once again focused on the major cities of the world, which Chinese investors now know well, such as London, Sydney, and the major US metropolitans of New York, San Francisco, Los Angeles and Chicago."

David Green-Morgan, head of global research for International Capital Group

"The emergence of Chinese capital into the global real estate market has been growing steadily over recent years and the fact that half of all Chinese purchases in 2014 were outside of China shows the demand for overseas property is likely to remain strong for many years to come.  The number of new Chinese investors JLL is in dialogue with demonstrates that we are likely to see outbound capital continue to grow in 2015, with the possibility of it reaching US$20 billion by year end 2015."