Australia is likely to continue to be a target market due to its
growing Chinese population and visitation levels; favorable tax
regime; weakening currency versus the Chinese renminbi over
the past five years, which is expected to persist; and higher yields
compared to other gateway cities in the US and Europe.
While SOEs and developers will continue to acquire and develop
significant assets in major gateway cities, a second wave of investors
from Asia is beginning to emerge: insurance companies. For
instance, in September, a Chinese insurance company acquired the
Waldorf Astoria, a luxury hotel with more than 1,400 keys in New
York City, for almost US$2 billion, representing the highest price
paid for a single hotel property in the US and the largest acquisition
of a US property by a Chinese company.30 It is predicted that Asian
insurers will become one of the largest investor groups in the
coming years, with an estimated US$75 billion to invest in global
real estate by 2018, as regulatory restrictions continue to ease.31
The China Insurance Regulatory Commission first allowed insurance
companies to invest abroad in 2012 and increased the maximum
allocation in real estate (both domestic and foreign) from 20% to
30% of total assets in February 2014.32 Real estate investment
restrictions have also been lowered in South Korea and Taiwan
over the past couple of years, increasing the maximum real estate
allocations permitted as well as streamlining the procedures for
investing in property abroad.33 Furthermore, a number of other
companies, in industries such as air travel and construction, are
investing and developing hotel properties in order to diversify their
income stream.