Chinese New Year has often been one of the most celebrated events in Asian culture, and more often than not coincides with international travel given the holidays. As travel returns to pre-pandemic conditions and the borders opening up in China, the Australian commercial property market is set to benefit from especially off the back of increased net overseas migration and the return of the international students.
Stonebridge Asia Practice Partner, Kevin Tong commented, “Since international travel in China opened up in December and early in the new year, the increased amount of enquiry from investors in China has been clearly noticeable. New and Old investors who have been stuck in China and unable to travel over the last 2 years, have jumped on the opportunity of international travel and many have earmarked Australia as the place to be.”
The international enrolment figures represent a clear indicator of the increased demand with student visa applications being 40% higher in the second half of 2022 than during the same period in 2019.
According to the Stonebridge team’s offshore research, Asian capital investment into commercial property returned in 2022, and whilst it was not at the same levels pre COVID the team witnessed a strong uplift from the last 2 years as a result of the lockdowns.
The Stonebridge Asia Practice team in total transacted 31% of the entire teams’ transactions to “Asian based” investors. This was a combination of both leased investments and development opportunities.
Out of the total transactions from the team there were several key attributes which stood out as preferences for this profile of investor:
- 94% of Asian investor purchasers were in Metropolitan locations
- 68% were leased passive investments (predominantly retail)
“Assets such as supermarkets drew a strong level of enquiry in 2022 due to their safe haven fundamentals. We saw a transition of more aggressive bidding coming from locally based groups with capital sources based in Asia. We expect capital from Asia to continue to grow in 2023, especially off the back of the proposed loosening of borders in China and the booming economy which Singapore is currently witnessing.” Added Mr. Tong
“Furthermore 38% of our teams’ supermarkets and neighbourhood shopping centres transacted to the Asian buyer profile, with many being acquired by syndicated groups of Asian investors.”
As we head into the year of the rabbit in 2023, we are anticipating demand from Asian investors to grow even further. We have already seen international student enrolment levels back to 2019 levels, and with China now loosening their COVID policy’s the opening of borders will only be a matter of time and the capital is knocking on the door to come out.
Stonebridge Asia Practice Partner, Chao Zhang has also made comment, “The activity from buyers in the market has kicked off early this year and this is very evident for our team based on the enquiry and buyer requirements we have received so far. Our discussions with many of the major foreign exchange groups in the country have clearly indicated that there is a lot of RMB to AUD exchange activity happening which will only mean more investment into Australian commercial real estate”