China’s real estate investment market continued its dynamic growth momentum last year with another record performance, firmly establishing itself as the region’s second-largest property investment market.
Foreign institutional investments account for 41% of all 2010 en-bloc transactions, compared to just 12% in 2009. The strong re-emergence of foreign investors, particularly the market-savvy Asian investor groups, highlights their continued commitment to the mainland’s real estate investment market.
Throughout 2009 and 2010, the market has been tantalized by the prospect of insurance capital entering it followed the government’s decision to allow them to invest up to 10% of their total assets in commercial real estate.
The sheer scale of the mainland’s insurance companies is enormous. According to the China Insurance Regulatory Commission, total insurance company assets were just over 5 trillion yuan in 2010, with a growth rate of 25% a year.
Investors in retail property are pursuing well-located opportunities nationwide, with activity across tier-2 and tier-3 cities set to increase exponentially in the years to come.