Asian Investment Makes a Comeback

Asian investment is making a comeback, after Chinese government restrictions slowed the influx of capital last year. In the first half of 2017, Asian investors were one of the biggest players in the real estate investment market, according to research from Commercial Café. While Los Angeles and other West Coast markets are among the most active markets for these investors, the two largest transactions from were in New York, totaling more than $3.3 billion.

“Historically, Asian investors have always had a soft spot for the West Coast,” Carina Bukos, a research analyst at Commercial Café, tells GlobeSt.com. “After the Chinese government's restrictions on foreign investments, we see other Asian investors, from Korea Investment Corp. to Singapore's GIC Real Estate and Japan's Mori Trust stepping in.”

Asian investment activity had slowed last year after the Chinese government placed restrictions on foreign investment. “As part of a large effort, the Chinese government has put a cap on the amount of capital that could be invested abroad each year,” says Bukos. “Also, due to government scrutiny, Chinese companies have pulled out of some major negotiations and have generally been less active on the market. The first half of the year had everyone following the new dynamic between the U.S. and China.”

The players are beginning to change as a result. “China's HNA Group did take the first spot in terms of the most expensive deal, with 245 Park Avenue in Manhattan, but it's more subdued than what it was a year ago,” says Bukos. “Of the new wave of Asian investors, GIC Real Estate has been the most active, with 2 deals in DC and a $1 billion acquisition of 60 Wall Street in Manhattan. With three deals under its belt, the Singapore-based company still came in second. It remains to be seen whether the Chinese slowdown or the push from other foreign investors will lead to a reshuffling if the key players' position.”

While Asian investment has been active this cycle, in the last year, we saw foreign investment from other countries pick up, particularly from Canada and Europe. “Asian investment is still prevalent in major U.S. markets, with competition from Canadian and European investors still relatively tame now,” Bukos. “It seems to be a move prompted by the window of opportunity created by the current situation in China, rather than a major effort of these companies to displace investments from Asia.”

Asian investment is making a comeback, after Chinese government restrictions slowed the influx of capital last year. In the first half of 2017, Asian investors were one of the biggest players in the real estate investment market, according to research from Commercial Café. While Los Angeles and other West Coast markets are among the most active markets for these investors, the two largest transactions from were in New York, totaling more than $3.3 billion.

“Historically, Asian investors have always had a soft spot for the West Coast,” Carina Bukos, a research analyst at Commercial Café, tells GlobeSt.com. “After the Chinese government's restrictions on foreign investments, we see other Asian investors, from Korea Investment Corp. to Singapore's GIC Real Estate and Japan's Mori Trust stepping in.”

Asian investment activity had slowed last year after the Chinese government placed restrictions on foreign investment. “As part of a large effort, the Chinese government has put a cap on the amount of capital that could be invested abroad each year,” says Bukos. “Also, due to government scrutiny, Chinese companies have pulled out of some major negotiations and have generally been less active on the market. The first half of the year had everyone following the new dynamic between the U.S. and China.”

The players are beginning to change as a result. “China's HNA Group did take the first spot in terms of the most expensive deal, with 245 Park Avenue in Manhattan, but it's more subdued than what it was a year ago,” says Bukos. “Of the new wave of Asian investors, GIC Real Estate has been the most active, with 2 deals in DC and a $1 billion acquisition of 60 Wall Street in Manhattan. With three deals under its belt, the Singapore-based company still came in second. It remains to be seen whether the Chinese slowdown or the push from other foreign investors will lead to a reshuffling if the key players' position.”

While Asian investment has been active this cycle, in the last year, we saw foreign investment from other countries pick up, particularly from Canada and Europe. “Asian investment is still prevalent in major U.S. markets, with competition from Canadian and European investors still relatively tame now,” Bukos. “It seems to be a move prompted by the window of opportunity created by the current situation in China, rather than a major effort of these companies to displace investments from Asia.”