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Institutional investors’ appetite for China real estate appears not to have been diminished by the covid-19 crisis of the 15 months. PERE fundraising data shows, for example, that allocations to China-focused funds grew from $2.05 billion in 2019 to $3.9 billion in 2020. CBRE data too highlights investor confidence with 57 percent surveyed signaling they intend to buy more China property in 2021, up from 42 percent in 2020, with only 11 percent saying they intend to buy less property in 2021, down from 22 percent in 2020.
And the ongoing hostile political tit for tat between China and the US, EU and UK is also not impacting domestic capital’s propensity to invest overseas; China outbound capital increased by 32 percent between 2019 and 2020, according to Real Capital Analytics data, with Hong Kong the top destination followed by Poland; the latter driven by Chinese investors’ growing interest in logistics property in Central and Eastern Europe.
Broader structural trends – demographics, urbanization, changing consumption habits and a growing reliance on technology and digitalization – are also driving investors’ sector preferences. Logistics is the current top choice – 47 percent of investors named it their favored sector in 2021, up from 33 percent in 2020, according to CBRE data – while alternative niche sectors like data centers, cold storage, self-storage are increasingly attracting the attention of private capital.
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