Thursday 23 November 2017

Chinese insurance companies freed to buy overseas commercial real estate

CBRE, the global property consultant group, has reported that Chinese insurers could spend about $14.4 billion on overseas commercial real estate, aided by a stronger local currency and easier regulations amid a limited supply of prime properties at home.

Chinese insurance companies freed to buy overseas commercial real estate

Ping An Insurance Group Co., China’s second-largest life insurer, in July agreed to buy the Lloyd’s of London building from a Commerz Real AG-managed fund for US$388 million

October 25, 2013

The strengthening of the Chinese yuan against foreign currencies such as the British Pound (up 6.3% this year) also makes such investments look increasingly attractive.

In 2012 China made it easier for insurers to buy real estate and other assets outside the country, a move that was expected to help them improve their investment yields.

“Most of the Chinese investors with sufficient capital are now facing limited domestic investment channels,” Frank Chen, head of research for China at CBRE, said in an email release.

The insurers are seeking high-quality office investments in international gateway cities such as London, New York and Toronto, according to CBRE.

Asian markets with similar cultural backgrounds such as Singapore, Hong Kong and Malaysia will also be major destinations, the report said.

Chinese insurers had total assets of $1.2 trillion in 2012 and new regulations allow these institutions to invest as much as 15 percent of assets in “non-self-use” real estate, CBRE said.

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