Thanks to the rise of wealth in China, many Chinese investors are finding overseas investment in real estate attractive; also, Luxembourg is being chosen by many Chinese banks from where to launch their European growth, and Luxembourg is already a substantial Renmimbi centre, with Dim Sum bonds now listed on the Luxembourg Stock Exchange.

On Monday evening, Deloitte Luxembourg hosted a Real Estate Forum looking at both investment in China as well as Chinese investment in Europe and other locations. Vincent Bechet, President of LuxReal, welcomed the attendees to the event and provided an overview of the event as well as introcucing LuxReal. Dirk Dewitte, President of China-Lux, introduced the Chinese business chamber in Luxembourg to those attending, explaining that Chinese speakers make up 50% of the membership.

Luxembourg was described in a short video screened at the start of the event to the 150 attendees as China's bridge to Europe.

Laurent Cooreman, CEO at CBRE Luxembourg, presented a Fact Analysis on the type of real estate acquirted in Europe over the past 12 months by Chinese investors and type of real estate acquired in China over the past 12 months by foreign investors. Although there is still little development in Western Europe, he singled out Dublin and Luxembourg where activity is currently strong. In Asia there is currently a slowdown as the economies go from a manufacturing economy to a consumer economy; however, he is very confident for future growth.

Prices have started to stabilise in China which leads to a focus on investing abroad. There are currently many Chinese institutional investments in Australia in hotels, as well as in the US (mainly west coast) in hotels and offices. He expects this to expand in the future to a broader range of assets, including retail. Private Chinese investors are looking at North America and the UK, as well as Australia; generally individual investors are looking for portfolio diversification. With investment funds not investing abroad yet, he believes that the Chinese regulator will drive a change to the law to enable this in the future for corporate investors.

Danny Po, Partner at Deloitte, talked about the driver for Chinese outbound investments into overseas Real Estate from an investor perspective, and considerations for Chinese inbound by foreign investors. He stated that Chinese investors are expected to invest €500bn overseas in the next five years; one reason is for the Renmimbi currency to become more international - currently it is not easy for Chinese investors to bring their money outside the country. Following national policies, there is a real need to invest overseas for the Chinese. Many choose to educate their children overseas; many (grown up children) then get jobs overseas and their families then follow them and move overseas too. As a result, more Chinese investment will be made overseas, including in real estate. Traditionally, Chinese look for stable income from safe investments.

He acknowledged that Chinese investors may not be strong enough to lead development projects so they will bring investment (finance) and will partner will local professionals to develop the real estate projects as their bring local knowedge with them. A new trend too for the Chinese is establishing Family Offices to manage private wealth and which invest in real estate projects too. It is difficult for them to find attractive projects in the domestic (Chinese) market, so this has driven them to look abroad for interesting investment projects.

He concluded by stating that the free flow of currencies is very important indeed for Chinese investors, before stating that Chinese are relying on advice from asset managers in overseas markets and are starting to take advantage of attractive investment opportunities in Europe. He presented a couple of brief case studies of Chinese investments in France and Belgium, in high-end real estate. He presented a graph which illustrated that the main real estate investment by Chinese last year was in London and New York, with Shanghai and Hong Kong just 13th and 16th in the list. Overall inbound investment in Chinese real estate, has not yet slowed down, however.

The ensuing panel discussion was moderated by Sven Rein (LuxReal) and included the two speakers plus Eric Zhibin Xie (Bank of China) and Augustine Chin (Diener Syz Real Estate) and focused on Chinese outbound / inbound real estate. The event concluded with a networking cocktail.

Photos by Geoff Thompson