Good news for Miami real estate players hungry for Asian capital. Chinese yuan’s depreciation makes U.S. real estate a safe bet.
A report from commercial brokerage CBRE shows more than half a billion dollars worth of Asian cash flowed into Miami real estate during this year’s first six months, making it the country’s fourth-most popular destination for investments from across the Pacific.
According to the report, Asian investors spent $665 million on real estate in Miami during the first half of this year, marking a massive jump in volume from the $34 million during the same time period in 2015.
The flow of capital from Asian countries, especially China, has reached record levels in the past year as investors seek to hedge themselves against risk in their domestic marks. In particular, the depreciation of China’s yuan makes investing in U.S. real estate a comparatively safe bet, according to the report.
The numbers are there to prove it: by CBRE’s count, Asian investors snapped up $14 billion worth of U.S. real estate assets during 2016’s first half, representing about 52 percent of all outbound investment for the region. In the U.S., New York enjoyed the most activity with $4.02 billion in investments, followed by San Francisco with $1.4 billion and Chicago with $1.34 billion.
Office properties take priority, making up about 43 percent of all investments, followed by hotels with 33 percent, according to the report. Japanese trading conglomerate Sumitomo Corp. recently made its re-entrance to the Miami market by purchasing the iconic Miami Tower for $220 million, marking one of the city’s biggest commercial trades of this year.
Besides outright property purchases, Asian investors are increasingly partnering up with local U.S. developers to build ground-up projects. Buying stakes in real estate companies is also now a commonplace practice to gain an immediate foothold in the industry.
“In recent years we have seen a confluence of events throughout Asia, particularly China, which have led to an incredible outflow of capital from these markets,” CBRE’s Still Hunter wrote in the report. “This capital, directed by individuals, intermediaries and institutions, has been heavily focused on U.S. real estate, with South Florida being a target market.” — Sean Stewart-Muniz
