Asian outbound investment declines 36% in 2018

Traditional stone lions in Soho, London. Alexey Fedorenko/Shutterstock

Outflows of property investment capital from Asia slid 36 percent year-on-year in 2018 mainly due to a rebalance of portfolios by Chinese investors, CBRE reported today.

Asian outbound real estate investment stood at just USD53.8 billion for the full year 2018, with outflows of capital from Singapore and South Korea outpacing those from China.

Chinese investors last year rebalanced their real estate portfolios and became net sellers of property in the second half of 2018, leading to a decline. Only USD7.5 billion in capital from China went into offshore real estate investments last year, a steep moderation from the USD35.4 billion deployed abroad in 2017.

“The pullback from China’s investors was not entirely unexpected but encouragingly created opportunities for new strategic investors to amplify offshore investment activities,” said Leo Chung, associate director for research in Asia Pacific at CBRE.

Investors from Singapore ploughed USD21.6 billion last year into overseas real estate, edging out its USD20.9 billion of outflows in 2017. Korean investors allocated USD7.3 billion in offshore property in 2018, versus USD6.3 billion the previous year.

Much of the capital poured out to other Asian countries, putting intra-Asian outbound investment at USD17 billion. Only EMEA received more (USD21.5 billion), making it the leading regional destination for Asian outbound capital.

The Americas attracted USD11.6 billion from Asian property investors in 2018 while the Pacific drew USD3.7 billion.

Luring 18 percent of Asian property investments, London remained the top urban destination for investors due to its strong fundamentals and enduring status as a preferred metropolitan area for first-time buyers of overseas property.