Chinese insurance industry will invest USD 73bn in global real estate bonanza by 2019

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Chinese insurance industry will invest USD 73bn in global real estate bonanza by 2019

Overseas real estate investment from the Chinese insurance industry is predicted to grow sharply in the next few years with USD 73bn expected to be allocated globally by 2019, according to a research report published today by Cushman & Wakefield.

A series of successive deregulation policies led by the Chinese government has allowed expansive investment potential in the last six years. China Insurance Regulatory Commission (CIRC) first permitted domestic real estate investment in October 2009 and prior to this, companies were only able to own properties for self-use. In contrast, today’s regulations allow up to 30% of total assets to be allocated to real estate and 15% in overseas investment, thus providing huge scope for accelerated investment.

The end of 2014 saw the total real estate holdings for the Chinese insurance industry account for only 0.8% of the industry’s total assets under management, well below the existing permitted allocation of 30%. This totalled just USD 13.4bn and underscores the potential for increased expansion in upcoming years.

Nigel Almond, research director at Cushman & Wakefield said: “For the largest five Chinese insurers, total allocations remain low and no greater than 2%, with some below 1%. Over recent years, investment activity has increased. This can in part be attributed to the liberalisation of foreign investment, which allowed top players to accelerate real estate acquisitions, as well as growth in the value of assets under management.”

Two notable transactions in recent years were the purchase of the historic Waldorf Astoria hotel in New York by Anbang Insurance for a record USD 1.95bn and Ping An Insurance’s purchase of Tower Place in London for USD 520m a year, after its pioneer purchase of the Lloyd’s of London building in 2013.

Read the full report by Cushman & Wakefield

 

Source: www.dtz.com

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