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In 2014, Chinese property investment in the United States reached $15 billion, with Miami as the newest goal.

Chinese outward investment in overseas real estate is expected to reach $15 billion by the end of 2014, according to a new study by Knight Frank.

The bulk of this investment has so far gone into gateway cities in Australia, the United States, and the United Kingdom. In 2014, Australia saw the greatest rise in inbound real estate investment from China, with a year-on-year increase of over 60%. However, new destinations offering discounts on prime land, such as Miami in the United States and the Gold Coast in Australia, are attracting Chinese high net worth investors. sales qatar

Knight Frank's Head of Capital Markets for Asia Pacific, Neil Brookes, said, "Today's investors are focusing on long-term returns that can be sustained. The Chinese government's policy drive to diversify into other countries, a softening domestic market, and the pull of higher returns available in overseas markets are the main factors for Chinese investors " Most Chinese investors are interested in Australia, the United States, and the United Kingdom. In 2013, we saw a five-fold increase in capital outflow from China into these three markets compared to the previous year. We expect Chinese investors' transaction volumes in these three markets to equal or even surpass last year's levels this year."

The softening of Chinese market conditions, as well as its low yield, lack of investable stock, and depressed residential markets, continue to impact Chinese investors and developers. We continue to see aggressive investment activities by Chinese institutional investors, banks, and developers as a result of government policy encouraging businesses to grow internationally. However, due to the policy-driven nature of the Chinese economy, there is still a possibility that policy changes would have an effect on China's outward investment.

Big developers followed, looking to diversify with an international footprint. Sovereign wealth funds are investing in trophy properties, and banks are purchasing land for owner occupation. Equity investors and insurance companies are looking for core and yield-driven opportunities in this third wave. We are now witnessing the emergence of a fourth wave of investors that is more difficult to forecast and monitor. These investors include ultra-high-net-worth individuals (UHNWIs), small- to mid-cap state-owned enterprises (SOEs), and private developers who are rethinking their international strategy and looking for new opportunities.

"Many provincial capitals and main cities in Australia, the US, and the UK have now offered a better yield spread (i.e. the difference between yield return from property investment and bond returns) than gateway cities of London, New York, Sydney, and Melbourne," said David Ji, Director, Head of Research & Consultancy of Greater China at Knight Frank.

According to Knight Frank report, only four of the top twenty Chinese insurance companies have made major offshore investments, while 40% are considering doing so.

"According to our awareness of overseas investment activities, only four of the top 20 Chinese insurance companies have made major offshore investments, while 40% are considering doing so. Chinese developers are becoming more aggressive, with half of the top 20 companies already investing offshore. If we look at small to mid-cap investors, we can see that there is a sizable pool of money available "David Ji agrees.

Chinese investors are diversifying their portfolios by shifting away from core office and residential growth and into leisure and industrial properties. Investors are now seeking to diversify geographically, shifting away from gateway cities and toward higher-yielding provincial capitals.

Knight Frank's Thomas Lam, Senior Director, Head of Valuation & Consultancy, added, "As Chinese HNWI investors mature, many of them begin to look for new investment opportunities in places like Johor Bahru in Malaysia, the Gold Coast in Australia, and Los Angeles and Miami in the United States. All of these hotspots offered better returns to investors than conventional overseas investment destinations such as London, New York, or Sydney " A number of recent investment hot spots have shown a discount in prime residential prices as compared to main Chinese gateway cities such as Beijing and Shanghai. For example, prime apartment prices in Los Angeles and Miami are around 25% lower than in Shanghai, attracting substantial interest from HNWIs ""China," says the speaker.

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