Chinese Real-Estate Investors Wary of Vancouver Head to Toronto

Rednekcowboy

Owner
Staff member
Get ready @HiVolt @dillyhammer @El Quintron

Chinese investment in Vancouver commercial property from companies such as Anbang Insurance Group Co. has slumped amid a flood of regulations, with investors looking to Toronto instead.


Asian investments in Vancouver fell to almost C$350 million ($260 million) in 2018, a drop from the C$1 billion-plus that hit the market in each of the two prior years, according to data from CBRE Ltd. In contrast, Toronto took in C$526 million of Asian investment last year, up slightly from 2017, including a C$256 million purchase of an office building by Chinese private investor Tigra Vista Inc.

Chinese investors are retreating globally following government restrictions on capital outflows in 2016. In Vancouver, Asian investment dropped off even more last year due in part to a series of new taxes instituted by the government, including a speculation and wealth tax on homes. The province has also proposed a bill to expose hidden land owners -- both residential and commercial -- and failure to disclose may result in a fine of C$100,000 or 15 percent of the property’s assessed value, whichever is greater, is driving away some investors.


“You have policy changes on a snap, on a whim,” David Ho, executive vice president at CBRE Ltd., said in an interview at Bloomberg’s Vancouver office. “Investors typically look at stability in a market and this is not stability.”


The numbers provided by CBRE are only based on known buyers though many “go to great lengths to protect their identities and remain confidential,” the brokerage firm said.

Ho focuses on bringing in new Asian capital to North American cities and while 90 percent of his business was in Vancouver last year, he predicts the city may account for only a fraction of the foreign capital this year with more deals done in Toronto. In total, Asian capital flows are projected to take up less than 20 percent of Vancouver’s commercial market, said Vancouver-based CBRE broker Tony Quattrin, compared to over 25 percent in the past three years.
Last month, Blackstone Group LP and Hudson Pacific Properties Inc. teamed up to buy Anbang-owned Bentall Centre in Vancouver. The Chinese insurance firm has been ramping up efforts to offload assets after being temporarily seized by the nation’s regulator.

Leaping Eastward

In Vancouver, Chinese investment “had always been predicated on land, placing bets on land, whether it’s old shopping centers or office buildings even -- they see underlying development and land value,” Bal Atwal, a principal at brokerage firm Avison Young, said. “They’re looking at Toronto now because they’re seeing a better arbitrage on that than they are here.”
Asian investors, who previously had marginal interest in looking east of Vancouver given the flood of opportunities, are now being forced to diversify their holdings. To cater to growing demand, CBRE is planning to shift more of its focus to bringing Asian investors to Toronto, which has a booming tech and financial services market, fueled by a flood of immigrants and millennials.
“That spells money because young people have to consume, they’re growing families,” Ho said. “That’s a huge advantage against the Vancouver market, which is more of a retirement market.”

Old Money

While money has been migrating away from Vancouver during the past few months, the shift may not be a permanent exit, said Robert Veerman, a CBRE sales associate. People are still trying to understand what the long-term effects will be of the British Columbia government’s policies.
“It’ll be very volatile for awhile but right now there’s no panic in the market, just some jitters,” Ho said. “How the government works out the policies moving forward a year, two years from now if they haven’t stabilized the psyche of the market, then would panic set in? I don’t know.”

Source: https://www.bloomberg.com/news/articles/2019-04-09/chinese-real-estate-investors-wary-of-vancouver-head-to-toronto
 

El Quintron

Administrator
Staff member
They're coming to Toronto now to wash their dirty money...

China is actually considered a thread to Canadian National Security, according to a newly released report.

China is essentially doing the same thing here that it was doing in Australia 10 years ago, Secret City, although a work of fiction, lays what China did to Australia bare.
 

El Quintron

Administrator
Staff member
While I feel that the Nat Sec issue is a separate one from capital movement, and I don't harbour any resentment towards individuals of Chinese descent we would be foolish to think that China isn't on an expansionist bent. Russian expats in London acting as defacto agents of the Russian federation are what we have to look forward to, if we don't set firm rules now.

This stuff isn't particularly complicated, as we already have it established in Banking, we just need to expand it to Real estate and other ways they flood our market with dark money.
 

HiVolt

Junior Member
Staff member
I also don't like that Canada hasn't responded in any way to the Chinese blocking our Canola exports.
 
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