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Chinese investors diversify in Australia

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Chinese investor spending on overseas properties increased by an enormous 205 percent between 2012 and 2014.

According to Knight Frank's latest report, Chinese Outward Real Estate Investment Globally and Into Australia, the total value of Chinese property development initiatives across the globe went ​from from US$0.6 billion in 2009 to US$16.9 billion in 2014. 

Latest figures show that investors from the Asian country have already spent more than US$7.8 billion in the first quarter of 2015.

This is a promising sign for Australia, which has seen a rise in Chinese spending in recent times. The Land Down Under has a unique advantage because destinations like Brisbane, the Gold Coast, Adelaide, Perth and  the regional suburbs of NSW & Victoria provide diversification opportunities. 

Knight Frank's Dominic Ong, Senior Director of Asian Markets, Capital Markets, said Australia stands to gain from this encouraging tend.

"It is expected that 2015 will be another record year for Chinese outward investment, both internationally and into Australia, with the expectation of more than US$20 billion worth of investments transacting globally. So far the majority of the Chinese outward investment has been focused in gateway cities of Australia, the US and the UK," he added. 

He added these investors are also sizing up the property feasibility of alternative sectors such as hotels and leisure, student accommodation, industrial assets and mixed-use developments

An interesting trend is emerging, according to Mr Ong, equity investors and insurance companies are entering the market looking for "core, value-add and yield-driven opportunities".

Thus far four of the top 10 Chinese insurance companies have made overseas investments, the remaining six are considering also considering expansion.

"Sunshine Insurance Group is the only one to invest in Australia, purchasing the Sheraton on the Park Hotel in Sydney for a record AU$463 million, however we expect these groups to be active on Australia listings in 2015," added Mr Ong.

Date Published: 04 Jun 2015
Category: General News

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