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Are Chinese conglomerates halting their real estate buying spree?

Are Chinese conglomerates halting their real estate buying spree? The first half of 2017 has seen a dramatic decline in commercial real estate investments by Chinese firms. The change is largely due to actions taken by Chinese government authorities to discourage such investments.

Global real estate investment numbers indicate that Chinese firms spent $10.6 billion on foreign property transactions in 2016. However, this figure has declined by 84 percent in 2017. Part of the reason for the massive scaleback is due to the China Banking Regulation Commission's cutting its funding of foreign property investments. Instead of foreign investment, the Chinese government prefers its business conglomerates invest in a massive road project intended to connect China with Europe.

The financial changes will likely affect the U.S. commercial real estate economy as well. Real estate deals made by Chinese businesses has accounted for 30 percent of Manhattan's real estate market transactions this year. However, compared to last year, commercial real estate prices are down by 55 percent. Other areas of the world, like the United Kingdom and Australia, are also expected to experience serious setbacks in their commercial real estate markets as a result of China's halt on foreign property investment.

If you or your company are thinking to make an important commercial real estate purchase in Denver, Colorado, an experienced commercial real estate attorney can help you evaluate your options and determine whether a particular property is the right match for you, your business and your goals. Your lawyer can also help you finalize the transaction in a legally appropriate fashion.

Source: Business Insider, "China has suddenly stopped buying foreign property," Jim Edwards, Aug. 08, 2017

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