China’s swift economic recovery from the pandemic, abundant liquidity, rapid leasing market rebound and several other supportive factors will underpin strong real estate investment momentum this year, with CBRE’s 2021 China Investor Intentions Survey finding that 57% of investors intend to purchase more real estate this year, compared to 42% in 2020.
Purchasing is set to be led by real estate funds and institutional investors. Respondents identified industrial & logistics as their most preferred sector for investment, supported by solid leasing demand and the rising availability of institutional-grade logistics properties.
CBRE’s survey found that investors are moving up the risk-return curve, demonstrating a rising preference for core-plus, opportunistic and distressed strategies. Buyers have raised target returns for these strategies compared to the period immediately prior to the pandemic as they look to compensate for elevated risk resulting from economic volatility.
Other key findings include Shanghai remaining the most preferred city for investment and Shenzhen being named in Asia Pacific’s top ten cross border investment destinations for the first time. Investors are displaying a stronger focus on sectors providing rent roll growth and assets riding on structural changes accelerated by the pandemic, such as data centres and cold storage.