China’s buying spree of overseas property (particularly in the US and UK) came to an end in 2018.   Though initially communicating to Chinese investment conglomerates in mid 2017 that they curtail their offshore investments, the government made it clear in 2018 that investors divest themselves of offshore property assets. Period. The more the country’s economy slowed, the more the government mandated forced liquidations.

Here is a list of the 6 most valuable overseas properties for sale by Chinese conglomerates in the United States:

  • a portfolio of luxury hotels – $6.500M
  • 245 Park Ave. in NY – $2,210M
  • Waldorf Astoria in NY – $1,950M
  • Vista Tower in Chicago – $900M
  • 850 3rd in NY – $4,63M
  • 181 W. Madison Street in Chicago – $3,59M

Since January 2018, this deleveraging of Chinese real estate assets has surged to $12.3B, more than twice the amount of $5.3B in 2017, according to data compiled by Real Capital Analytics.

Additional disposals of Chinese overseas investments include

  • Pier 4 Offices in Boston
  • 33 S. 6th/City Center in Minneapolis
  • Biotech Industrial Park Project in San Francisco
  • 1180 6th Avenue in New York
  • 123 Mission Street in San Francisco

(No dollar amounts for the above properties were included within our available data.)

“While capital controls remain in place, China will not be the main driver of Asian outbound investment,” said Stephen Yang, the senior director of global capital markets for CBRE Group Inc. James Shepherd, the managing director of Greater China Research with Cushman Wakefield, underlined this point by saying, “The deleveraging trend will continue through the first half of the next year.”

None of these properties is languishing for new ownership. There are some very willing buyers…American investors have already bought up more than 40% of these properties to the tune of $5.1B so far.   Other players include investors from Hong Kong ($3.2B), Singapore ($1.4B), China ($966.4M), the United Kingdom ($417.4M) and South Korea, Australia, Japan, Israel and Taiwan.

According to Tom Moffat, CBRE’s Hong Kong-based head of capital markets in Asia, “The ongoing uncertainties of trade conflicts will put pressure on foreign reserves and the value of the yuan, so capital controls will most likely continue in 2019.”

No wonder Chinese nationals are not investing in US residential properties as they had prior to mid 2017.

 


[mashshare]