China's outbound investment in real estate has shown an explosive growth in recent years. In 2013, outbound property investment from China was nearly US$16 billion, with US$8.5 billion of that invested in the first eight months.

According to the global real estate services company, Colliers International, "we only saw investments reaching US$70 million six years ago."

The prices of high-end properties around the world have been on the rise, with some of the prime areas of New York, London and Paris being fully rented out, Philip N. Feder, chair of the global real-estate division of international law firm Paul Hastings, said. The law firm has 20 offices worldwide.

There is fierce competition for investment in offices, business buildings and residential properties in these areas, which offer stable rental income. As a result, sovereign wealth funds, Middle Eastern companies, and small private equity firms are under tremendous pressure, Feder told the 21st Century Business Herald.

"Unlike the foray of Japanese investors into the US property market in the past, we have found that many Asian investors, particularly institutions and property developers from China and South Korea, are financially sufficient enough to complete transactions without taking loans," Feder noted.
According to Rick Kirkbride, a partner at the law company's Los Angeles office, Chinese investors are more competitive in the overseas property market as they have abundant funds in stocks.

As China's booming property market has shown signs of a cool-down, domestic investors have been quickening their pace in investing in overseas realty markets, the Beijing Times said.

In the first half of 2014, Chinese overseas property investments totaled US$5.4 billion, up by 17% from the same period last year. Even though about US$4 billion of this amount was invested in business properties, the rise was mainly a result of growth in investments in residential units. A year-on-year comparison revealed that Chinese investment in these overseas residential units rose by 84% to US$1.5 billion in the first half of the year.

Currently, Chinese institutional investors, development companies and individuals with a high net worth have all their sights set on the property markets of Europe and the US, said David Blumenfeld, a partner at Paul Hastings' Hong Kong/Shanghai office.

Large property developers are speeding up their pace to get into international property markets by cooperating with local property developers to form joint ventures to invest in development projects, Blumenfeld added.
 

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