The Chinese pullback won’t bring down real estate prices, according to Brookfield exec

A pullback from Chinese investors won’t have a major impact on real estate prices, according to Brookfield Property Partners CEO Brian Kingston.

Investors from Europe and the Middle East are still hungry for real estate, and a global shift from low-yield, fixed-income assets to real estate will push property prices for the foreseeable future, Kingston told Bloomberg.

“There was a lot of headlines around how much capital was coming out of Asia,” he said. “The reality is it’s broad-based. It comes from a lot of places.”
Chinese outbound investment plunged earlier this year after hitting a record in 2016 as the country’s government put tighter controls in place in an effort to shore up its currency.

In Manhattan, deal volumes have been declining since hitting a peak in 2015, but pricing continues to rise. Transaction volumes totaled $9.9 billion in the first half of the year, according to Cushman & Wakefield, which puts the market on track to record its lowest total since 2008.

Pricing for Manhattan real estate, however, was $1,483 per square foot in the first half of the year, a 3 percent increase from 2016 and 11 percent above 2015, according to Cushman data.

And amid the deal slowdown, Chinese firms continue to grab their share of headlines, including HNA Group’s $2.21 billion purchase of 245 Park Avenue earlier this year from Brookfield and its partner in the property, the New York State Teacher’s Retirement System. [Bloomberg] – Rich Bockmann