Chinese Property Spree Continues Amidst Local Spending Encouragement
Chinese investors continue their record-breaking spending spree, even as they have been encouraged by the Chinese government to keep the yuan circulating domestically. The Real Deal reported that China had gone from buyers to sellers real quick. From 2008, Chinese investors have bought up every available property in the US; by 2018's end, they have started to sell more than they bought.
For instance, Anbang Insurance Group has been shopping their $5.5 billion hotel portfolio around. This included properties in Chicago, New York, and San Francisco. The Wanda Group had offloaded property located in posh Beverly Hills while also looking for buyers of a majority stake they hold in Chicago's Vista Tower. So far, the only purchase belonged to a Chinese consortium, which bought an $11.6 billion Global Logistics Properties asset.
China has merely reacted to the punitive efforts set forth by the US government under president Donald Trump. There was a time-as Bisnow shared-when China was full of confidence coming into last year and this year. During the Davos World Economic Forum in 2017, Chinese president Xi Jinping bared China's plan of becoming the world leader in terms of globalization.
The Chinese investors mobilized, spending $41.5 billion in investments outside the country. Real Capital Analytics recorded that amount in 2016 and, in 2017, they added $1 billion into that amount. Logicor's purchase-to the tune of $14 billion and the biggest European deal to date-added to that illustrious amount of Chinese investments.
As it appears, the US government is keen on stopping China from reaching heights. The China-US trade war weighs heavily on the economy, and the Chinese government sees increased local spending one of the only ways to combat it. It is evident that the lifting of the trade tariffs that the US imposed is a big lift for renewed Chinese foreign investments.
Chinese investors, who see foreign investments as a way of shielding their assets from the times, have continued to buy properties. However, these properties are considered safe investments and are mundane. China Life Insurance's investment in a portfolio of Georgia and South Carolina-based shopping centers is an excellent example.
With the tightening of government controls aimed at local spending, Chinese companies will continue to off-load assets while targeting affordable properties. The US will only get hurt more than they reap the benefits of this trade spat from the looks of things.