Foreign cash to flow into GBA property, says brokerage

Foreign capital is expected to flow into the Greater Bay Area as the masterplan boosts prospects for the region’s property market, according to international brokerage JLL.

“In the past, southern China was perceived as being a difficult market to invest because of the tight yields and, as a result, a lot of money went to Shanghai and Beijing. But the government’s promotion of the GBA is now drawing more overseas developers and investors to the region,” says Denis Ma, head of research for JLL Hong Kong.

Developers from Hong Kong are looking to expand on the mainland, with major players already investing in excess of RMB5 billion, including Wharf Holdings and Kerry Properties.

Singaporean investors are having an impact, too, while Taiwan has overtaken the US to become the third biggest cross-border investor into GBA cities.

Hong Kong, Shenzhen, and Guangzhou will receive the most investment but the smaller cities will see the spillover effect as their economies advance, JLL says.

Silvia Zeng, head of research for southern China at JLL, sees retail as an attractive sector for foreign investors, who may take advantage of “smaller but high-quality assets” and the promising outlook for population growth.

The opening of China’s capital markets could further spur foreign investment into real estate as well as financing opportunities.

While hopes for growth have been pinned on the recently opened Hong Kong–Zhuhai–Macao Bridge, JLL believes the region’s wider infrastructure plans will go further to cut travel times and increase the area’s appeal as a base for business.