Deleveraging In China Boosts Real Estate Investment
Real estate investment in the Asia-Pacific rose by 14% in the first quarter of 2019 to $45 billion, helped by deleveraging in China and flows of cross-border capital, according to a report by global real estate consultant JLL.
China accounted for close to 40% of Asia-Pacific transaction volumes between January and March. At $17 billion, that was more than double the amount for the same period in 2018, JLL said on Thursday. The increase was helped by the $1.6 billion sale and leaseback agreement between China online retailer JD.com and Singapore sovereign fund GIC, as well as Swiss private equity firm Partners Group’s $1.3 billion acquisition of Beijing’s Dinghao Plaza from Sino Horizon Holdings. JD is led by billionaire Richard Liu; Sino Horizons is controlled by the family of Taiwan billionaire Jason Chang.
“The Chinese government’s focus on deleveraging has impacted the availability of credit for local borrowers and pushed some owners to divest assets in order to reduce debt,” said Stuart Crow, CEO of Asia Pacific Capital Markets at JLL, in a statement. Foreign investment into China accounted for nearly half of its transaction volumes, mostly from Singapore, the U.S. and global private equity firms, JLL said.