Chinese property firms' overseas expansion

Traditional destinations of immigrants top the money flows, said Fu Zhenhuang, analyst from Deloitte, adding that investment has been most active in London, New York, Singapore, Sydney, Manchester and Hong Kong.

Statistics from Savills, a real estate agent, suggest that Chinese consumers invested $13.5 billion in the overseas market in 2013, almost double that of 2012.

Huang Yuwei, executive CEO of an overseas property investment company, said his company sold less than 10 houses a year seven years ago, and now move 15 to 20 daily.

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"Investing in overseas property will be much more impressive in the next ten years," he said.

Calculations based on the asset scale of the Chinese high net worth individuals suggest that 1,100 billion yuan will flow into overseas properties.

Hidden risks

Risks are accompanying this overseas exploration. Zhao Yongshuang, deputy CEO of Yihe Real Estate, said the group has developed in New York, Boston, Los Angeles in the United States and also Mauritius in Africa because of the complete financial and credit system in those markets. "However, Chinese enterprises have to be cautious,"he said.

Political instability tops the list of risks, said Long Bin, head of the Hopefluent Real Estate Economic Research Institute.

Beijing Zhongkun Investment Co Ltd had proposed to buy 300 sq km of an island in Iceland, but the deal failed after two years of waiting for government's approval.

"The industry is teeming with risks that are easily ignored due to its high profit. The property market scale, tax and interest rate fluctuation, political frictions, any of these factors could lead to failure," said industry insider Zhang Yong.

Zhu Fei noted Malaysia as an example, where the market is cooling down as investors sit on the fence after the MH370 tragedy.

"They should have investigated the risks thoroughly and avoided blind investment," said Zhu Fei.

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