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Chinese investors flock to commercial property

Melbourne skyline retailA wave of Chinese investors has driven commercial property sales in the second half of 2017, accounting for 53 per cent of all transactions undertaken by CBRE’s Melbourne City Sales team in the second half of 2016.

CBRE’s national director for city sales and Australian retail investment properties, Mark Wizel, said that the first six months of 2016 were slow, seeing Chinese investment drop to a four-year low, but that by August, demand had skyrocketed.

“What we saw was quite incredible, with 75 per cent of the 45 development sites transacted by CBRE [in August] sold to mainland Chinese buyers,” Wizel said.

“What we tend to see is that capital moves in waves, with quiet periods usually lasting around three months, but in 2016 this downturn lasted seven months.”

The re-emergence of Chinese buyers led to their strongest ever period, culminating in more properties sold to Chinese buyers in the last five months than any other five-month period since 2009 during the GFC.

Offshore Chinese buyers are continuing to show interest in properties in 2017, with one purchasing the Spring Hill Shopping Centre earlier this month, the fourth Victorian neighbourhood centre transacted by an offshore group in the last 12 months.

“There is now a clear shift in requirements from these buyers to diversify away from residential development to income-producing investments, with particular preference for shopping centre assets. We anticipate the trend will continue in 2017,” the CBRE Victorian retail investments team said.

The Springhill campaign fielded over 121 enquiries, 31 per cent of which were from off-shore investors.

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