Investment profile of Chinese investors

Chinese commercial property investment in Australia is reaching record highs, with the country’s share of foreign direction investment in Australia tripling between 2007 and 2012 and preliminary figures suggesting that number could go higher in 2013.

Real estate group Colliers International said the trend reflected changes in both countries.

"In 2012, Chinese outbound property investments around the world set a new record of around US$4bn, a trend that is continuing into 2013," said Malcolm Tyson, Colliers International chief executive for NSW. 

"The [Chinese] appetite for Australian real estate assets has grown significantly due to the relatively sound Australian economy, close proximity to China and regulatory changes from both the Chinese and Australian governments which have made it easier for them to invest their wealth in Australia."

According to Tyson, Chinese investment is largely coming from four major sources:

1. Banks and financial institutions

Major Chinese insurance companies have been seeking offshore investment opportunities since restrictions on them investing in overseas property were lifted last October.  Developed countries have been of particular interest to them.

2. Developers with global ambitions

Chinese real estate developers view Sydney as a major gateway city – along with cities like London, New York and San Francisco – and have extended their investment footprint here as a way to diversify their holdings.

3. State-owned enterprises

China's large state-owned enterprises and sovereign wealth funds are investing in global real estate markets because of their increasing purchase power, thanks to a the strengthening Chinese RMB.

4. High Net Worth individuals

Wealthy Chinese are snapping up overseas residential properties in view of the slowdown of domestic growth and the fact that China still offers few channels through which they can invest their wealth.

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