Chinese overseas RE investment could nosedive this year: Morgan Stanley

Capital controls are threatening to hurt NYC real estate

Chinese overseas real estate investment could fall by 84 percent this year and another 18 percent in 2018 amid a government crackdown on capital outflows, according to a new report from Morgan Stanley.

This should concern Manhattan’s real estate market, where 30 percent of deals signed this year involved a Chinese investor, Bloomberg reported. Last year, the U.S. accounted for 43 percent of all outbound Chinese real estate investment.

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In May, The Real Deal reported that new Chinese capital controls, which are designed to stabilize the country’s currency, as well as a broader regulatory crackdown on big institutions is making itself felt in the New York market.

In one notable example, Anbang Insurance Group backed out of a reported deal to buy a stake in Kushner Companies and Vornado Realty Trust’s 666 Fifth Avenue for unclear reasons.

And on Monday, news broke that Anbang may be forced to sell the Waldorf Astoria hotel and repatriate funds. TRD‘s Paydirt column this week looked at how the market might respond if the Chinese companies that have changed the skyline go into hiding. [Bloomberg] Konrad Putzier