Singapore has emerged as the second most-preferred outbound destination in Asia by mainland Chinese investors, who are forced to park their money overseas due to slowing real estate market back home, according to Cushman & Wakefield and reported in the media.
The property consultancy also attributed the current capital outflow to abundant liquidity among wealthy investors, investment institutions and developers as well as the strong renminbi.
Notably, the Chinese injected US$3.23 billion (S$4.18 billion) into Singapore’s real estate market from 2008 to June 2014. Of these, 50 percent was spent on development sites while 23.8 percent went on retail assets, it said in a report.
Meanwhile, mainland Chinese investors pumped US$3.84 billion (S$4.99 billion) into Hong Kong over the same period.
The report noted Chinese investors spent a total amount of US$33.7 billion (S$43.78 billion) on 353 deals from January 2008 to June 2014, with greenfield investment as well as mergers and acquisitions being the most popular investment models.
While Chinese investors appear to prefer mature markets such as the US and the UK, they have also warmed-up to Southeast Asia. In fact, Malaysia, which also emerged as a hotspot, saw Chinese investors inject US$2.07 billion (S$2.69 billion) into its real estate market during the same period.
The property consultancy revealed Chinese investors prefer strata-titled offices in Singapore and land development in Malaysia. In Europe, they are generally drawn to commercial real estate.
Looking ahead, Cushman expects the Chinese outbound investment trend to continue, as cash-rich companies and wealthy individuals look further afield to expand their global presence.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
