BlackRock, the world’s largest asset management company, stated that it is currently avoiding increasing investments in the Chinese real estate market.
Hamish MacDonald, the Asia-Pacific real estate manager and chief investment officer at BlackRock, expressed at a press conference in Singapore on Tuesday (September 24) that they feel there is still a long way to go before truly investing in the Chinese market. “China is currently not in our investment strategy,” he added.
MacDonald mentioned that investing in China would require significant restoration of investor confidence and improvement in the fundamental supply and demand dynamics of the real estate industry.
According to a report by Bloomberg, BlackRock has previously engaged in commercial real estate investments in China, including an office building in Shanghai, which is currently being discounted for sale.
MacDonald’s comments came after the People’s Bank of China announced a series of measures to boost the economy and the real estate sector, highlighting the challenges faced by Chinese policymakers in restoring global investor confidence.
The real estate market remains a major issue for the Chinese economy. Many economists argue that if Beijing intends to sustain economic recovery, it needs to decisively address the sluggish real estate market and take strong measures to stimulate consumption.
The measures announced by the central bank this time focus on reducing lending. However, China’s borrowing costs are already low, and the mortgage lending for real estate in China does not support refinancing similar to other countries.
Regarding the impact of Beijing’s latest stimulus measures on the real estate market, MacDonald stated, “I hope to see overseas capital paying attention to the real estate market, and also hope to see domestic capital buying real estate, but currently, both types of buyers are not many.”
He noted that the situation is constantly changing, and while China remains their investment target, they are currently more interested in real estate markets in countries such as Australia, Japan, and Singapore.
It is reported that BlackRock plans to invest $1 billion in the life sciences sector in Australia in the future. MacDonald mentioned that clients are focusing on the Asia-Pacific region to diversify their global investment portfolios but are not seeking additional risks.
MacDonald emphasized that real estate investment deployment in the next 18 months will be crucial.