US Real Estate Markets Benefit from China’s New Currency Regime
A year ago, t the Chinese exchange rate dropped a record 1.9 percent versus US dollar showing much greater flexibility in their exchange rate of the Renminbi vs the US dollar. With different opinions and concerns regarding the country’s economy, the global Real estate industry became the sector most benefiting from the uncertainty, as different investors became interested in acquiring properties abroad. They also became interested on other financial institutions to hold real estate properties rather than cash.
After the Renminbi became the most-talked topic last year, different investors from the mainland increased their acquired property in Hong Kong and in the United States. We all know that the value of properties in the US is tied to US dollars. For almost nine months, Wheelock and Co a Hong Kong developer sold their towers from their One Harbour Gate complex located in Kowloon to some investors. It is insured with China Life which acquired the other tower with the price of HK$5.86 billion last November. Cheung Kei Holdings owned by Shenzhen billionaire Chen Hongtian got the tower from the east for HK$4.5 billion.
Darren Xia, Head of JLL’s International Capital Group in China said that “Buying foreign currency-denominated assets help China’s biggest investors to diversify their portfolios.” He also added that “As Chinese investors become more experienced in cross-border deals, Chinese institutions have played a part in some of this year’s largest transactions in the world’s biggest real estate market”.
Aside from buying different overseas properties, Chinese investors have also been more interested in getting domestic-based real estate.