China's Impact on Global Real Estate

Posted by Staff writer on May 05, 2016 09:41 AM EDT
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BEIJING, CHINA - OCTOBER 27: A Chinese soldier stands guard in front of Tiananmen Gate outside the Forbidden City on October 27, 2014 in Beijing, China. (Photo : Kevin Frayer/Getty Images)

For the first quarter of 2016, Chinese companies have spent $102 billion on overseas investments. According to report from the Wall Street Journal, this number surpassed the volume spent by China for 2015, which totaled $106 billion.

While much of the business is in mergers and acquisitions, especially in the agribusiness sector, Chinese purchases of real estate properties and/or interests have made a splash in the global real estate market. Amongst the purchases were the $13 billion spent for Starwood Hotels & Resorts Worldwide Inc. The total volume for the quarter had already surpassed $16 billion.

London was also a major venue for Chinese investments in real estate properties. In a report from, two major edifices in the London skyline were recently snapped up using funding from China. The buildings are the Aldgate Tower located in London, which was purchased for £346 million by a consortium formed between China Life Insurance and Brockfield Property Partners.

The other major property is the known 17 Columbus Courtyard located in the Canary Wharf development project. The property's new owners are Hainan Airlines Group, through its investment arm. Other notable investments include the Airport City development project located at the Royal Albert Docks with funding coming from China Minsheng Investment.

In Europe, the Unicredito headquarters in Milan, known as Palazzo Brogi, the Edificio Espanol in Madrid among others are now owned by Chinese companies such as the Fosun Group and Wanda Properties respectively.

 In the United States, China has also infused its funding. Amongst the prime properties now under Chinese ownership were the Waldorf Astoria Hotel, the General Motors Building, 717 Fifth Avenue, 1 Chase Manhattan Plaza and Brooklyn's Atlantic Yards.

Much of the push comes from China's own government. When Chinese Premiere Xi Jinping visited the UK in 2015, he announced a projected £42.6 billion infrastructure investment in commercial properties located around London City's airport.



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