Surging commercial property investment from China

By Greg Bell

Have you been considering purchasing commercial property for sale on the Gold Coast?

It appears that some of our Eastern neighbours have been thinking the same thing. A recent report from CBRE Research shows that the flow of Chinese money into Australian commercial property has skyrocketed over the last five years.

Of all the foreign property purchases in Australia since the start of 2014, investors from China are responsible for a third. This accounts for nearly $3billion worth of capital.

Further statistics show a clear bias for Australian commercial property over other nations. From just USD$1billion in 2010, Chinese investment in real estate around the world rose to USD$10.5billion in 2014. What's impressive, though, is Australia attracted more than 15 per cent of this expenditure, despite our economy only making up 2 per cent of the global GDP.

So what does it mean for commercial property for sale in Surfers Paradise?

Chinese interest in Aussie real estate

A report from KPMG and The University of Sydney's China Studies Centre revealed that the proportion of Chinese investment into commercial property in particular reached new heights in 2014.

Nearly 46 per cent of total capital investment from China was focused into commercial property. What's astonishing, though, is that this represents a surge upwards from 14 per cent only one year earlier.

The influx of Chinese investment includes the recent backing of 'Jewel' by the Wanda group, armed with one of the richest men in China as the chairman.

This is one of the largest commercial property projects in Surfers Paradise, with the design consisting of three towers that are intended to look like crystals on the beach. Very large crystals, as this is expected to cost a cool $1billion.

Construction is expected to start early next year and be completed by 2018. The site on Old Burleigh Road was sitting dormant since 2010 before the Wanda group agreed to partner the project.

This is great news for commercial property for sale on the Gold Coast, as not only will it provide employment but it could also entice other foreign investors to want a piece of the pie.

Will the demand continue?

The China-Australia Free Trade is expected to be fully in place before the end of the year. CBRE Australia head of research Stephen McNabb believes this will support foreign investment and help assist projects like Jewel get off the ground.

"Flows from China into global markets are expected to remain firm, with potential upside, as regulatory changes over the past three years have allowed a higher investment allocation into real estate for life insurers, rising from 10 per cent to 30 per cent, and offshore investment to a limit of 15 per cent across all asset classes," he said.

Buy commercial property on the Gold Coast

With these details in mind, is it a good time to be purchasing commercial real estate in Surfers Paradise? Given that the forecast for foreign investment in commercial property for sale on the Gold Coast is bright, it wouldn't be a bad idea to purchase real estate now with the goal of making capital gains down the line.

Furthermore, acting now means you will be able to take advantage of the historically low cash rate, which won't last forever.

If you are contemplating the leap into commercial property on the Gold Coast, you should talk to the team at Ray White. We will work with you to find the most suitable real estate, by taking note of your financial capabilities, future plans and the market you want to target.

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