Top property executives have engaged in concerted efforts to draw investment from China’s leading insurance firms to Australia’s shores.
Representatives from China’s five biggest insurance companies met with some of Australia’s leading property executives last week in Sydney, as part of a real estate tour arranged by the Asia Pacific Real Estate Association (APREA).
Participants in the property investment tour included senior executives from China Pacific Insurance Company, Ping An Asset Management, New China Life, Sunshine Insurance Group and Taikang Asset Management.
According to APREA, China’s insurance sector is set to invest around US$14 billion in overseas real estate markets, with Australia in a prime position to capture some of this spending due to its location in the Asia-Pacific and its status as a first world Anglosphere economy.
This is not the first time this year that APREA has sought to court big-ticket investors from the Middle Kingdom.
In March, the group arranged meetings between local property firms and representatives from some of China’s biggest investors, including Beijing’s State Investment Development Corporation. Property companies participating in the meetings included UBS and Propertylink.
Chinese state-owned investors have already made bold forays into Australia’s office property market with the $305 million purchase of Sydney’s Centennial Plaza on Elizabeth Street by sovereign wealth fund the Chinese Investment Corporation, which has a staggering half a trillion US dollars in assets under management.
Many observers are now anticipating a wave of property investment from China as the country seeks to diversify spending of its huge stockpile of foreign reserves.
In just the past three years, China’s foreign reserves have ballooned from just over US$2 trillion to US$3.7 trillion – an amount that is more than twice Australia’s GDP. The country’s investment abroad could have major implications for the global markets for various asset classes.
Investment from China has already shaken up the residential property markets of Australia’s major cities, with strong demand for apartments in Sydney and Melbourne in particular from the parents or guardians of Chinese students pursuing an education in Australia.
This has led to a surge in prices, as well as driven a spate of construction of new apartments in Australia’s two biggest cities.