Guangzhou, Shenzhen investment inflows surge

A rising tide of international investment into real estate in Guangzhou and Shenzhen is being fueled by the Greater Bay Area masterplan, according to a recently released report by international brokerage Cushman & Wakefield.

Last year, property transaction volumes by foreign investors in the two cities amounted to RMB 54.6 billion, slightly down from RMB 57.5 billion in 2017, but more than three times the RMB 17.5 billion recorded in 2016, prior to the initial announcement of the Greater Bay Area plan.

Momentum has continued to ease up so far this year, with the combined foreign consideration in the two cities amounting to RMB 7.5 billion in the first quarter. Still, that still puts it on track to be double 2016’s value. 

Office and retail properties are the most sought-after by foreign investors, accounting for 40% and 25%, respectively, of the total number of foreign transactions over the past 10 years.

Alvin Yip, Cushman & Wakefield’s President of Capital Markets, Greater China and Head of Capital Markets, China, said, “We expect to see more foreign private equity real estate funds enter the investment markets of Guangzhou and Shenzhen given their strong economic fundamentals and proximity to Hong Kong. Competition is likely to intensify as both foreign and domestic players are scrambling for investment opportunities, especially within the commercial asset classes.”

Find the full report here.