Investors targeting overseas property

By YAO JING (China Daily) Updated: 2014-07-31 08:02

Dalian Wanda Group Corp Ltd became one of the first Chinese investors to enter the Spanish market with a purchase of an office building in Madrid from the Santander Banking Group.

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The introduction of the Golden Visa, where foreigners who buy real estate are granted visas, in many southern European countries, has also raised the profile of these locations amid Chinese mainland investors.

The slowing real estate sector at home is one of the reasons why investors are switching to overseas markets.

However, Wang Sheng, managing director at real estate consulting firm DTZ North China, warned that the trend for Chinese developers pulling out of the domestic market and focusing on overseas markets is risky.

"Once Chinese interest rates rise, the property will be devalued," said Wang.

Further, the investment cycle for a project at home is shorter than overseas.

"It is much easier to find a buyer in the domestic market when the investor hopes to withdraw capital," Wang said.

Green-Morgan at JLL said given the continued rise in Chinese outbound investment over the first half of the year and number of groups looking to invest outside of China, the full-year outbound investment in property should easily overtake the $11 billion in 2013.