No deals were recorded in the UK real estate market by mainland
Chinese investors in the third quarter – the first time since Q2 2015.
lack of activity comes as overseas investment in real estate from mainland
China continued to trend downwards.
According to Cushman & Wakefield’s latest report, Chinese
investors spent US$2.6bn (£2bn) overall in Q3, a 41% drop from the previous
quarter. The change in direction can be explained by ongoing controls on
outbound investment and a clampdown on lending to real estate developers and
investors. The average size of each transaction fell to US$87m (£66.98m) in Q3,
down from an average of US$161m (£123.95m) in Q2.
As trade tensions heated up, Chinese investment into the US
continued to trend at low levels, totalling just US$119m (£91.62m) for Q3.
Meanwhile, Chinese investors sold US$1.2 billion (£920m) worth of assets in the
US to shore up balance sheets back home.
Cushman & Wakefield calculates that approximately US$2.1bn
(£1.62bn) of overseas real estate assets were sold by Chinese investors in Q3
as the trend towards divestment of overseas real estate assets continued.
Meanwhile, in Hong Kong, it observed a surge in mainland Chinese investment,
which increased by 215% year-on-year in Q3.
James Shepherd, managing director of greater China research at
Cushman & Wakefield, said: “Though mainland Chinese investment into the UK
stalled in Q3 for the first time in 14 quarters, Cushman & Wakefield
expects this should recover given that the long-term fundamentals of the UK
market remain attractive to Chinese investors.”
Jason Zhang, head of China outbound investment and advisory
services at Cushman & Wakefield, added: “Cushman & Wakefield expects
Chinese investors to mainly focus on the Hong Kong market in the near term.
However, according to our discussions with clients, traditionally favoured
markets such as the UK, US, Australia and some countries in Southeast Asia
still greatly interest mainland Chinese investors.”