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News release

CHICAGO, IL

Chinese Commercial Real Estate Buyers Pump Record $7.6B into Foreign Investments in 2013

U.S. and U.K. markets attracted most capital in 2013; Chinese outbound investment could reach $10B in 2014


CHICAGO, Jan. 27, 2014 — Chinese buyers broke borders and records in their drive to purchase foreign real estate in 2013, increasing their commercial real estate investments to $7.6 billion, a rise of nearly 125 percent, according to Jones Lang LaSalle.  This compares to $3.3 billion in 2012 and $2.9 billion in 2011.

The United States and United Kingdom real estate markets attracted most of this capital from China in 2013;  the U.S. with $3.1 billion (up from $264 million in 2012) and the U.K. with $2.3 billion (up from $1.3 billion in 2012).  In Asia Pacific, Chinese money focused on Australia and Singapore, which attracted $700 million and $1 billion, respectively. In 2012, Australia attracted $USD209 million from China; while Singapore did not see any investment from China.

Alistair Meadows, Director and Head of JLL’s International Capital Group in Asia Pacific said, “The initial catalyst for this dramatic rise in outbound investment has been the introduction of the ‘Go Global’ policy by the Chinese government. This relaxation of government policy has enabled and encouraged outbound investment across all sectors of the economy. As a consequence insurance groups, developers, and ultra-high net worth individuals (UHNWs), have increasing sought to diversify their real estate portfolios internationally in the last 12-18 months. This is a long term structural shift where Chinese capital will become a permanent and growing feature of the global real estate markets.”

New York and London top the cities which attracted the most money from China into commercial real estate; Chinese investors spent $2.9 billion in New York, representing a considerable increase on 2012 when they spent $200 million in the city. London has for some time been a city of choice for overseas investors, including Chinese, and in 2013 attracted $2.1 billion from China.

“There was a dramatic increase in the amount of Chinese investment in U.S. real estate in 2013, with transaction volumes more than tripling the previous high year,” said Rob Hielscher, Managing Director, Jones Lang LaSalle’s International Capital Group.  “Most mainstream Chinese companies haven’t started investing abroad yet; the groups that we’re seeing in the U.S. are the most entrepreneurial.  This is just the tip of the iceberg.”  

David Green-Morgan, Global Capital Markets Research Director at JLL added, “Although individual large transactions can account for a large proportion of investment in a city, for example the GM Building and One Chase Manhattan Plaza in New York, or the Grand Orchard Hotel in Singapore, we are seeing a definite increase in interest in overseas markets from Chinese investors. Though they typically prefer large assets in the dominant, established transparent and liquid markets, such as New York and London, we are also seeing interest in other markets for example Manchester in the UK.”

The office sector continues to dominate as the preferred asset class amongst Chinese commercial real estate investors that are active overseas, accounting for 85 percent of all transactions they made in 2013. However, there is an increasing interest in retail and hotels, as well as residential land development, as demonstrated by Greenland’s recent purchase of the Ram Brewery site in London and Dalian Wanda’s decision to build a hotel and residential complex at Nine Elms in London.

Steve Collins, International Director, Jones Lang LaSalle’s International Capital Group added, “We expect interest and activity from equity rich Chinese buyers in overseas real estate markets to continue to grow in 2014; we think it is possible that the total volume of spend by Chinese investors on commercial real estate outside of China could pass the $10 billion mark in 2014.”

Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2012 alone, Jones Lang LaSalle Capital Markets completed $63 billion in investment sale and debt and equity transactions globally. The firm’s dealmakers completed $60 billion in global investment sales and buy-side transactions, equating to nearly $240 million of investment trades completed every working day around the globe. The firm’s Capital Markets team comprises more than 1,300 specialists, operating all over the globe.

For more news, videos and research resources on Jones Lang LaSalle, please visit the firm’s U.S. media center Web page: http://bit.ly/18P2tkv.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. For further information, visit www.jll.com.