MIPIM 2016: RE investment in China outstrips UK

China has attracted $57 billion of real estate bound capital since the global financial crisis, far more than its Asian and European counterparts, a report by Cushman & Wakefield has estimated.  

The real estate market in China has attracted an estimated $57 billion of capital in total from domestic and international sources since 2009, overtaking the UK to become the second largest country in terms of global capital inflows after the US, according to a report released by Cushman & Wakefield today.

In its 2016 Great Wall of Money report the property services firm said capital raised for real estate investment in China since the global financial crisis reached $57 billion, whereas the UK attracted $49 billion. The US firmly maintains its spot at the top with $148 billion. China has outstripped the UK over the course of 2015. Indeed according to last year’s Cushman findings, both China and the UK attracted similar amount of capital of around $47 billion.

“Over half of this raised capital is from investors domiciled in China with the remainder mostly from North American funds but also some additional capital in the rest of Asia Pacific and Europe,” noted the report.

In one recent example, the Dutch pension fund manager PGGM recently committed an additional $160 million to a China logistics fund launched by Redwood. Given PGGM is only one among a number of global institutions that have committed capital via the fund, the report talked about how the trend demonstrates China’s growth potential as funds seek to increase their weighting to this major market. The loosening of policy to stimulate the economy is further amplifying this trend.

According to Cushman investors continue to focus on concentrating their efforts in a single country as opposed to multiple regions. Close to 58 percent of the investors were estimated to have had a single country mandate in 2015, almost unchanged to the 59 percent share a year ago. This is in contrast to the 42 percent committed to multiple countries.