Chinese investment abroad falls by 67% amid capital controls

Regulatory crackdown is impacting the NYC real estate market

TRD New York /
May.May 11, 2017 05:00 PM

Chinese outbound investment fell by 67 percent in the first four months of 2017, according to Bloomberg — the biggest decline since 2009.

The drop comes after a record year in 2016, when Chinese firms bought $246 billion worth of foreign assets. Tighter capital controls, designed to shore up China’s currency and promote investment within the country, are likely to blame. Regulators now discourage splashy real estate deals abroad and investments by Chinese companies in overseas assets that aren’t strictly related to their business.

“China’s outbound M&A activity will likely remain slow for the rest of this year,” Bee-chun Boo, a Beijing-based lawyer at Baker & McKenzie LLP, told Bloomberg.

Fearful of Chinese buyers not following through on their promises, some sellers now demand higher deposits. For example, C C Land Holdings agreed to put down a 287.5 million-pound, or $371 million, deposit when it offered 1.15 billion pounds, or $1.48 billion, for the so-called Cheesegrater tower in London.

In its May issue, The Real Deal broke down how capital controls are already impacting the New York real estate market.

“There are larger deals that were effectively halted and a few deals that got killed,” “There are larger deals that were effectively halted and a few deals that got killed,” Wendy Cai-Lee, a former executive at East West Bank, told The Real Deal. [Bloomberg]Konrad Putzier 


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
The pandemic is leading to huge losses in value for hotels, malls and other commercial properties (iStock)

Troubled commercial properties see values fall 27%: report

Troubled commercial properties see values fall 27%: report
Charles Rettig, Commissioner of the IRS (Getty)

Opportunity Zone rule change seeks to entice foreign investors

Opportunity Zone rule change seeks to entice foreign investors
United Wholesale Mortgage Mat Ishbia and Gores Holdings IV CEO Alec Gores (Photos via United Wholesale Mortgage and Gores)

United Wholesale Mortgage goes public with $16B valuation

United Wholesale Mortgage goes public with $16B valuation
 The Qualtrics Tower at 1201 2nd Avenue in Seattle with Hana Financial CEO Kim Jung-tai and Skanska USA CEO Richard Kennedy (Google Maps)

$700M Seattle office tower buy would be among largest Covid-era property deals

$700M Seattle office tower buy would be among largest Covid-era property deals
Nightingale’s Eli Schwartz and 111 Wall Street (Credit: Google Maps)

Nightingale, Wafra seek $860M to redevelop 111 Wall Street

Nightingale, Wafra seek $860M to redevelop 111 Wall Street
(iStock)

Banks see CRE loans delinquencies hit 5-year high

Banks see CRE loans delinquencies hit 5-year high
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...