The wave of Asian investors underwriting commercial real estate deals across Canada is on the rise and expected to grow in 2015, according to a new report.
Colliers’ Spark Report: Chinese Capital Emerging in Commercial Real Estate, published yesterday, found that the global outflow of Chinese capital reached a record US $18 billion in 2014, up significantly from $2.3 billion in 2010.
In Canada, specifically, Chinese funds were behind several landmark deals that took place across the country, including approximately 700 acres of development lands at Fairmont-managed resort, Le Chateau Montebello & Development Lands, in Montebello, Quebec; residential development site, King Blue Condos, in downtown Toronto; and a residential development site east of downtown Vancouver in Port Moody, B.C.
“An unprecedented amount of capital has flowed out of China just in the last four years,” said Adam Kosoy, senior managing director of Capital Markets & Investment Services for Colliers International Canada.
“Our stable and primarily resource-based economy is making us a choice destination for this funding and we expect this trend to continue across 2015, assuming no marked shifts in Chinese governmental policy cause restrictions on capital outflows.”
While Chinese investor activity to date has been mainly land development-oriented, Colliers said it believes that with expanding capital flows and increasing demand for assets, Chinese bidders will be active on trophy investment offerings such as Class A office projects, perhaps bringing in competition for Canadian commercial investors.