Greater China Outbound Europe

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Greater China Outbound Europe - The Dragon Breathes Fire

Weaker growth across Greater China and growing volatility on local stock markets, especially in Mainland China, has led to negative headlines and expectations that outbound investment from Greater China would cool. The reality across Europe in 2015 was a record level of Chinese investment of EUR8.5bn, a 22% increase on 2014. This reflects continued demand from mainland China, but also growing activity from Taiwanese investors.

  • There was increased diversity in the investor base, with private companies and corporates joining institutional and sovereign funds as the main active investors in 2015.
  • The geographic focus changed. In the UK there was more investment in the regions outside London and there was greater investment activity in Continental Europe. We see this trend continuing, with Germany coming more into focus.
  • Investment is shifting to a broader range of asset types. Retail increased its share, with continued investment in offices and alternative assets like hotels and residential. We see a continuation of this trend, with logistics set to join the mix.
  • We expect further investment to come as investors continue to diversify away from home markets. Europe is set to gain from EUR70bn of global spending power from Chinese institutions.
  • Whilst some money will remain on core long income assets, those investors with an existing footprint may consider more value-added opportunities.

Contact the author:

Frederick Newman
Capital Markets Research
+44 (0)20 3296 2348