South Koreans plough into offshore property markets as mainland Chinese pare down investments
- Strict capital controls and Beijing’s belt and road push have led to a dramatic fall in Chinese investment in overseas real estate
- The vacuum left behind has opened opportunities for other Asian countries – particularly South Korea – to increase their global real estate portfolios, say analysts
Mainland China’s investments in overseas properties plunged last year amid stringent capital controls and a push by the government to get companies to put their money into belt and road infrastructure projects instead.
The vacuum left behind has opened up opportunities for other Asian countries to increase their global real estate portfolios, according to analysts. South Korea in particular has benefited.
In 2018 and the first quarter of this year South Koreans spent US$3.47 billion on overseas propery, equivalent to almost two thirds of the US$5.59 billion invested by mainlanders. A year earlier they had deployed US$2.04 billion for investments in overseas property, a mere 5.5 per cent of the US$37 billion invested by Chinese, according to data from Refinitiv.
“The Koreans and other Asian investors today are seeing less competition from the mainland Chinese companies because they are not investing in commercial real estate today [especially] in Europe because Beijing is encouraging them to invest in the ‘Belt and Road Initiative’ and most of these projects are related to warehousing, logistics, and industrial projects,” said Terence Tang, Colliers International’s managing director, capital markets and investment services, Asia.
He was referring to Chinese President Xi Jinping’s flagship project to plough billions of dollars of investment into ambitious global infrastructure projects spanning dozens of countries to boost trade.
