Outbound Real Estate an Opportunity for Services

AmCham China Chairman, James Zimemrman, Welcome Remarks.JPG

A 1926 advertisement in the Chicago Tribune is attributed as the source of the familiar aphorism: “There are three things that matter in property: location, location, location.” This old expression still holds true today more than ever, and indeed has much application for outbound investments in real estate. Individuals and corporate entities from China are investing extensively in US residential and commercial property, foremost in wealthy coastal locations such as New York and Los Angeles.

Why does this matter to AmCham China? Because our services sector members – law firms, architectural firms, real property consultants and brokers, accounting firms, visa consultants, universities and so on – stand to gain from outbound real estate investment.

In the past five years, there has been a dramatic increase in the investment in real property in the US by Chinese investors. This partially is a result of the reduced restrictions on outbound investment, and at the same time the US economy has strengthened and is a highly attractive market for commercial and residential property investors.

Chinese investment in the US will continue to expand, particularly as Chinese companies and individuals accrue wealth and the government attempts to diversify the country’s large foreign exchange reserves. The influx of Chinese investment is buoying local real property markets in ways unseen in the past. Chinese high-wealth investors prefer to buy US property on an all-cash basis.

China’s commercial investors range from Dalian Wanda Group Co. Ltd. – China’s largest commercial property company and the world’s largest cinema chain operator – to state-owned and private insurance companies, high technology firms and private equity firms.

Chinese investors are oftentimes not as experienced as other international investors, and thus the opportunity for services firms – and especially those with a presence in China and having Chinese language capabilities – will continue to increase.

In addition to the benefit to our economies, another important but unquantifiable benefit is the value of people-to-people exchanges that results from outbound real estate investment. Both the Chinese and American citizens benefit from greater engagement, enhance mutual understanding between our countries that is brought by increased travel and investment opportunities.

Outbound real property investment is good for America and American business, and a key target sector for AmCham China and its member companies.