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

CEO Brian Kingston says shift from fixed income to real estate will drive investment for decades
August 21, 2017 08:35AM

Brookfield Property Partners CEO Brian Kingston and 245 Park Avenue

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