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Paris, 9 December 2014 – High level of cross-border investments from Asia and the Middle East.In 2013, these two areas both invested between $10 and $12 billion outside of their respective regions. Over H1 2014, $5.4 billion was invested by Chinese investors; this is equivalent to a25% increase compared with the same period in 2013. JLL forecasts that these investors will invest over $10 billion in international markets over 2014.Chinese investors began investing in Paris over two years ago. Around 15 significant office and hotel transactions have been carried out, including the acquisition of the hotel Mariott on theChamps-Elysées by a Chinese group via its Hong Kong based holding company. However, these investors prefer to be highly discreet.“Asian institutions, such as sovereign wealth funds or insurance companies, are using real estate as an asset class in its own right. They’re targeting Paris by selecting Core or Core+ risk profiles with large unit sizes, generally between €150 and €200 million as a minimum” explains Alexandra Yinying Li, Head of Asia Business Development & Investor relations at JLL. These investors favour ‘off-market’ deals.Chinese conglomerates and developers are targeting the Greater Paris Region in particular as they search for large-scale, mixed-use development opportunities.“Since 2012, Middle Eastern investors have accounted for an average of 28% of overall real estate investment (offices, retail, industrial and logistics) in the Greater Paris Region. One of thelargest transactions of 2014 was carried out by the Olayan family with Risanamento's disposal of €1.3 billion of assets", added François Blin, Head of International Investment in JLL’s CapitalMarkets team.These investors account for over a quarter of capital investments in the French hotel sector.Asian investors have invested €900 million since 2008 and have been behind virtually all of the hotel transactions that have taken place in Paris and its inner suburbs.In addition, we have recently seen joint transactions between Chinese and Middle Eastern Investors for iconic investments in France and further afield. “Hotel Peninsula” between KataraHospitality and HK&SH Hotels, “Hotel de Crillon” between the Saudi Arabian Royal Family and Paris Region: a Gateway city for Asian and Middle Eastern investors the New World Hospitality group (HK) and “Canary Wharf Tower” in London between China Life and Qatar Holding with an overall investment volume of €1,351 million.
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