Chinese investment in
US real estate will grow "dramatically" in the coming years as Chinese investors continue to bring capital to a more stable property market.
"By New York standards, by US standards, these are huge, wealthy, capitalized companies, and they're all looking for a foothold in the US. So we think with the continued regulatory cooling off of the markets in China, we're going to see more and more of that capital come into the US," William Shanahan, vice-chairman of investment properties at CBRE, told China Daily.
Shanahan said the announcement last week that Chinese insurance company Anbang Insurance Group was acquiring New York's Waldorf Astoria hotel was the latest in what commentators are calling a string of "trophy" purchases by Chinese investors.
But he said it's not the most accurate description of Chinese investors' actions.
"That is the common domestic thought, that they're all trophy seekers. That's probably not a good moniker. I think what they're looking for is property that will hold value in up or down markets, properties that will hold their value over time," Shanahan said.
"Those tend to be trophy properties. They tend to be properties like (the General Motors building), it tends to be a One Chase Manhattan Plaza or the Waldorf. That property will always be one of the most valuable hotels in New York, if not the most valuable."
Shanahan said investors were smart to buy "irreplaceable" assets that will hold their value in markets good or bad.
"Those assets will attract buyers or sellers, so I think if you look around to find the iconic assets in New York, that's probably going to be what they're looking for," he said.
Chinese investors are moderating their yield expectations on their investments since yields in markets like New York and London tend to be thin, he said, but the investments are more stable. Yields are higher in Asian markets like Hong Kong, he said, but the real estate environment is more volatile.
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