Chinese investors are building up portfolios of U.S. commercial property as they look for new avenues of diversification.
Chinese entities announced more than $5.89 billion in projects in January-October, nearly six times the $996 million for all of 2011 and 2012 combined, showed data from New York-based consultancy Rhodium Group.
China’s push into U.S. property is underpinned by declining investment returns at home, a growing desire by wealthy individuals and developers to diversify their holdings overseas, and property companies looking to capitalize on offshore migration.
“Some investors want to diversify their assets, and some are looking for different growth opportunities,” said Julien Zhang, international director in Beijing for property consultancy Jones Lang Lasalle, which is advising three Chinese conglomerates on property deals. “Others want to learn how to enter mature and developed markets.”
A rebound in U.S. real estate pricing, tight inventory in major cities, and continued low interest rates also are attracting Chinese buyers, said Gary Locke, the U.S. ambassador to China.