What do New York’s most famous hotel, the Lloyd’s of London building and the headquarters of the U.K.’s top law firm have in common? They’re all owned by Chinese insurers.
This new breed of buyers, who weren’t allowed to invest overseas before 2012, are flooding into the global market for prime commercial real estate after being given more freedom to deploy their $1.6 trillion of assets. That has meant good times for sellers of trophy real estate in major cities.
“It’s becoming a seller’s market now if you have a prime property,” said David Green-Morgan, global capital markets research director at Jones Lang LaSalle Inc. “The new investors have helped push the prices higher in the bigger cities.”
The hunt for trophy properties mirrors an earlier push by Japanese investors, who spent $78 billion on U.S. properties including New York’s Rockefeller Center between the late 1980s and 1995. That ended badly for many Japanese buyers who were forced to sell when the U.S. fell into recession.
The Chinese insurance industry, where three of the top five companies are state-owned, spent an estimated $15 billion on overseas properties last year, according to Knight Frank LLP. That’s almost triple the total of two years earlier. This year the figure will grow to more than $20 billion, Jones Lang LaSalle predicts.
Read more at Bloomberg.