Prop­erty in­vestors ‘to re­turn to Asia’

New Straits Times - - Business World -

Chi­nese real-es­tate in­vestors are los­ing in­ter­est in the United States as their con­cern over yuan de­pre­ci­a­tion eases and ques­tions swirl around Pres­i­dent Don­ald Trump’s stance on pro­tec­tion­ism.

That’s the view of An­drew Hask­ins, ex­ec­u­tive direc­tor of Asia re­search and ad­vi­sory ser­vices at Col­liers In­ter­na­tional, who ex­pects Chi­nese cap­i­tal to re­turn to Asia as in­vestors pull out of Amer­ica.

“The bulk of yuan de­pre­ci­a­tion has prob­a­bly al­ready hap­pened, and if that’ the case there is less in­cen­tive for Chi­nese in­vestors to place money in US dol­lar-de­nom­i­nated as­sets,” said Hask­ins in an in­ter­view.

Af­ter de­clin­ing 13 per cent against the green­back over the past two years, the yuan has gained al­most one per cent this year.

Po­lit­i­cal con­cerns “may also slow the pace” of Chi­nese in­vest­ment in the US, es­pe­cially if the new ad­min­is­tra­tion trans­lated pro­tec­tion­ist rhetoric into re­al­ity, he said.

Asian prop­erty in­vest­ment in the US surged to a peak of US$33 bil­lion (RM146.8 bil­lion) in 2015, rep­re­sent­ing 51 per cent of ag­gre­gate in­vest­ment out­side Asia that year, ac­cord­ing to Hask­ins, who cited Real Cap­i­tal An­a­lyt­ics data sup­ple­mented by Col­liers cal­cu­la­tions.

The fig­ure fell by 12 per cent to US$29.1 bil­lion last year, of which Chi­nese cap­i­tal ac­counted for 43 per cent, he said.

It was “no co­in­ci­dence” that the pop­u­lar­ity of the US surged over the years when the yuan was de­pre­ci­at­ing steadily against the US dol­lar, he said.

More sig­nif­i­cant, he noted, is a pick-up in in­tra-re­gional real es­tate cap­i­tal flows, which stood at around US$70 bil­lion last year.

While the por­tion of China’s in­vest­ment within Asia — 17.4 per cent last year — was “not yet dom­i­nant”, main­land Chi­nese in­vest­ment in for­eign prop­erty would be high and “in­creas­ingly di­rected to­wards Asian rather than non-Asian mar­kets”, said Hask­ins, with­out spec­i­fy­ing any coun­try in par­tic­u­lar.

“Chi­nese in­vestors to some ex­tent see Hong Kong as a proxy for the US due to an ex­plicit cur­rency peg.”

He also noted that Hong Kong­dol­lar de­nom­i­nated as­sets would be less ap­peal­ing as the yuan sta­bilises.

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