Hong Kong beats US and UK as top destination for Chinese property capital

Transaction volume surged 155% to US$3.4b in April-June.

Hong Kong has maintained the top spot as the leading destination for Mainland Chinese Real Estate Investment Overseas (MCREIO) after accounting for nearly 80% of global MCREIO transactions in April-June, according to real estate consultant Cushman & Wakefield. 

Also read: Half-year commercial property investment activity hits $89b as office market remains heated

Chinese transaction volume in Hong Kong ballooned 155% YoY to post the third highest Hong Kong quarterly volume at US$3.4b.

Australia emerged as the second most preferred destination of outbound Chinese capital at US$400m over the same period. The United Kingdom and the United States follow with US$355m and US$81m respectively.

Low-yielding offices are a favourite of PRC investors, representing 88% of their total investment into the SAR in April-June. Industrial properties represent 6%, condominiums at 5% whilst retail accounted for a measly 2%.

Also read: Trade tensions could slash H2 commercial and industrial property deals by 12%

Cushman & Wakefield also noted that the absence of en-bloc investment opportunities in core areas has prompted Chinese investors to acquire quality assets in decentralised areas, citing the US$1.9b acquisition of Cityplaza Three and Four from Swire Properties.

“We expect PRC investors to maintain their focus on en-bloc office properties in the second half of the year,” the firm added.

Amidst intensifying trade tensions between the US and China, Cushman & Wakefield Hong Kong, Australia and countries linked to the Belt & Road initiative are poised to be on the receiving end of outbound Chinese property capital in the coming months.