Foreign investors to drive more of Beijing’s real estate market
Foreign investors will play a bigger role in driving Beijing's property investment market this year due to their increasing financing activities in Asia, industry experts said.
In its largest-ever fundraising activity, US private equity firm Blackstone raised $7.1 billion to invest in real estate across Asia.
UK-based real estate asset manager AEW Capital Management also announced that it had raised $1.2 billion for an Asia-Pacific property fund that includes Beijing as a target market.
"As foreign investors become more active in Asia, we expect to see them buy more assets in China, especially Beijing," said Michael Wang, head of capital markets for North China in JLL. "Meanwhile, as the financing conditions tighten for domestic players this year, foreign investors will have a bigger chance than before."
The Postal Savings Bank of China, for an instance, has purchased the new Everbright Center built in Tongzhou, Beijing, for 4 billion yuan ($597 million), the highest profile transaction in Beijing during the second quarter.
The performance of Beijing's bulk property investment market in the first half of 2018 was flat, with only 14 transactions amounting to 10.2 billion yuan, a 50 percent year-on-year decrease, according to a report from Savills.
That said, institutional investors are still eyeing Beijing's real estate opportunities, especially those that are scarce in high-quality locations or those that have stable rental returns, according to Savills.
According to Wang from JLL, the volume of institutions' investments into Beijing's property this year will probably exceed last year's 25 billion yuan, according to JLL's report.
Wang Jiaqi and Fan Hang contributed to this story
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