appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Zhu Wenqian

From shopping malls to warehousing and logistics companies, a wave of deals by foreign funds in China is injecting liquidity into a property sector scarred by years of struggle.
Several Wanda Plazas – the sprawling mixed-use developments that were once the flagship assets of tycoon Wang Jianlin’s Dalian Wanda Group – received fresh capital injections from global asset manager PAG in June and July.
The cash-strapped developer has been forced to offload properties to repay debt. Such deals, alongside a pickup in property transactions in mainland China’s top cities this year, have drawn growing market attention.
Five years after the Evergrande crisis triggered a prolonged slump in the property market, renewed activity by international investors – often thought of as “smart money” – has raised hopes over whether the sector has passed an inflection point.
“For global funds with a strategic allocation to China, the current market opens up opportunities to acquire high-quality assets at significantly more attractive pricing than in recent years,” said James Macdonald, head of research for China at property consultancy Savills.
“Investors are not necessarily calling the bottom. Rather, many believe valuations have adjusted sufficiently to offer a more favourable risk-adjusted return profile.”
The ‘bottom fishers’
Foreign commercial property investment in China peaked between 2018 and 2021.
In addition to foreign developers that benefited from the country’s decades-long residential property boom, global asset managers – including US private equity groups Blackstone and KKR, Singapore’s property group CapitaLand, and US real estate investment manager AEW – poured money into commercial property.
Sustained participation from foreign capital … has injected much-needed liquidity into the market … helping accelerate the bottom-finding process and supporting stabilisation and recovery
Yan Yuejin, E‑house China Research and Development Institute
This included grade A office buildings, urban renewal projects and long-term rental flats in first- and second-tier cities. These investors remained active even during the worst of the Evergrande crisis.
New York-headquartered Blackstone, co-founded by US billionaire Stephen Schwarzman, made headlines in June 2021 with its HK$23.66 billion (US$3 billion) offer for Hong Kong-listed Soho China, the largest office developer in Beijing and Shanghai. The deal collapsed three months later after parties failed to surmount regulatory hurdles.
In 2024, four Hong Kong-registered units under Blackstone spent 279 million yuan (US$41.3 million) to buy out the remaining 20 per cent stake in four mainland China-based warehousing and logistics companies, consolidating full ownership. The portfolio remains with Blackstone.
When meeting Vice-Premier He Lifeng in Beijing in March 2025, Schwarzman said Blackstone had full confidence in China’s economy and was willing to expand its investments in the country.
In its purchases over the summer, PAG acquired three Wanda Plaza properties: one in Shanghai; another in Quanzhou, southeastern China’s Fujian province; and another in Zhanjiang, Guangdong province. The deal, which expanded its footprint in the mainland’s commercial property sector, was closed by the PAG-led Suzhou Anyi Equity Investment Fund.
Unlike last year’s landmark transaction – in which 48 Wanda Plaza assets were sold to a consortium made up of PAG, Sunshine Insurance Group, JD.com and Tencent Holdings – the latest agreement stemmed from independent negotiations between PAG entities and Wanda Group.


Correction creates opportunity
China remains the world’s second-largest economy and one of the largest institutional real estate markets. Despite weaker household holdings, property – along with stocks, gold and other alternative investments – continues to be a key asset class for institutional investors.
National industrial and logistics transactions reached 58.5 billion yuan in the 12 months to March 15, up 19.3 per cent year on year, according to Savills.
Domestic buyer activity remained broadly stable, while foreign investment rose noticeably, with more capital deployed by overseas fund managers in the sector, the consultancy said.
“Established regional and community shopping centres with a strong mix of retail, food and beverage, and leisure tenants have generally proven more resilient, supported by stable consumer demand and uses that are less easily replicated online,” Savills’ Macdonald said.
“Combined with an experienced operating platform, this provides scope to enhance asset performance through active asset management while benefiting from long-term income generation.”
Yan Yuejin, vice-president of Shanghai‑based property consultancy E‑house China Research and Development Institute, said global capital had helped steady market expectations, particularly after years of adjustment drove a roughly 30 per cent correction in valuations across the country’s commercial property market.
“They are bullish on core cities with deep housing price corrections and robust consumer markets, with relevant policy support expected to gain further traction,” Yan said.
PAG, he added, was not just buying the assets but overseeing operations and value‑add improvements, laying the groundwork for future exit options, including through real estate investment trusts.
Asset price corrections have unlocked opportunities attracting interest from global long-term investors, who nonetheless remain selective.
“Sustained participation from foreign capital, especially inflows from opportunistic funds, has injected much-needed liquidity into the market and brought professional asset revitalisation expertise, helping accelerate the bottom-finding process and supporting stabilisation and recovery,” Yan said.
Domestic players step in
Chinese companies are also revitalising distressed assets. One Sunac Opus, a top luxury residential project near Beijing’s central business district, was scheduled to be delivered by the end of this year, China Citic Financial Asset Management said on July 30.
The state-owned asset management company (AMC) helped to complete the debt restructuring of Hong Kong-listed Sunac, founded by property magnate Sun Hongbin and once among China’s largest private developers.
A major project in downtown Beijing, the development faced numerous challenges, including construction delays and sluggish sales.
Through a full-cycle solution by the AMC – including debt acquisition, restructuring, closed-end fund management and supervision of project operations – the project’s legacy risks have been resolved, allowing the development to resume regular operations.
Hints at housing recovery
While global investors are showing interest in China’s commercial property assets, the residential housing market remains in a separate phase of the adjustment cycle, largely driven by domestic policy support and supply-demand rebalancing.
Foreign investments reflected confidence in the long-term fundamentals of specific assets rather than a broad-based recovery across China’s real estate market, Savills’ Macdonald said.
Over recent months, local governments have continued to roll out optimised home-purchase policies and inventory-destocking measures, supporting gradual stabilisation in the property market.
New home prices in China’s four first-tier cities – Beijing, Shanghai, Guangzhou and Shenzhen – rose by an average of 0.1 per cent in June, extending a four-month rebound and signalling a gradual recovery in sentiment, according to the National Bureau of Statistics.
Beijing’s local housing authorities jointly announced on August 7 that for households without the capital’s hukou – China’s residency registration system – the mandatory social security or personal income tax payment requirement for buying commercial housing inside the city’s Fifth Ring Road was lowered from two years to one year.
Beijing recorded 93,583 online-signed transactions for second-hand homes in the first six months, up 5.7 per cent year on year and hitting a new high since the same period in 2021, according to a report by China Index Academy this month.
While transaction volumes had rebounded notably, the sustainability of the recovery depended on whether trading momentum could hold and how price trends evolved, the report said.
Our positive sector view is backed by likely stabilising sales growth in July to September … and a stronger new launch pipeline from September
Griffin Chan, Citi Research
Signs of improving home sales have also emerged in other cities. A Citi Research report in late July forecast sales growth and a recovery in new housing launches starting in September.
July already saw improvements in transaction volumes for both new and pre-owned homes. Among 18 monitored cities, second-hand home sales rose 7 per cent year on year, with first-tier cities leading the recovery at a 14 per cent annual increase, the report said.
“Our positive sector view is backed by likely stabilising sales growth in July to September on resilient transaction volumes in core cities and a favourable low base, and a stronger new launch pipeline from September,” said Griffin Chan, an analyst at Citi Research.
Foreign capital helps steady the market
Beijing’s policymakers, who have mobilised a variety of measures to ensure home delivery in recent years, have continued rolling out supportive policies for the housing sector.
Largely driven by residential development, the property sector was once estimated by market players to contribute roughly a quarter of the country’s economy, but has turned into a drag over the past five years.
At a July 30 meeting, the Politburo – a major decision-making body of the ruling Communist Party – made fresh vows to stabilise the property market, part of its efforts to establish safeguards within broader economic risk-prevention measures.
Meanwhile, authorities have optimised institutional conditions for foreign individual investment in domestic property. Since 2025, China has refined its policy framework for stabilising foreign capital inflows, gradually rolling out a raft of supporting measures.
In September 2025, the State Administration of Foreign Exchange issued a guideline: non-resident individuals meeting home purchase conditions may settle foreign exchange funds for property purchases at banks upon presenting a sales contract, and then submit the filing documents to the bank.
The measure streamlined review procedures and expanded nationwide a scheme that was previously piloted with Hong Kong and Macau residents, allowing them to purchase homes in mainland cities that were part of the Greater Bay Area.


Why Shanghai offers hope for China’s ailing real estate market

Beijing can rewrite China’s property rules, but it can’t undo the damage

Improving migrant workers’ living standards key to boosting Chinese consumption: HSBC

Chinese court guidance aims to smooth developer bankruptcies, reassure creditors

China property

Foreign capital is dipping its toes into China’s property sector. Is a rebound in store?

 Illustration: Dennis Yip

Chinese families turn to cash and cautious stock bets as real estate avenues narrow

Property’s share of Chinese household assets dropped to 52 per cent in the first quarter of 2026 from 67 per cent in mid-2021, according to a Goldman Sachs report. Photo: Getty

More Chinese families are cautiously weighing stock investments, according to Goldman Sachs. Photo: EPA

China sees flurry of commercial property deals as investors sniff out bargains

Commercial property deals in Shanghai have risen significantly in recent months. Photo: Shutterstock

What makes McDonald’s assets stand out amid a weak Hong Kong retail property market?

A McDonald’s shop on Yee Wo Street in Causeway Bay, Hong Kong. Photo: Handout

Hong Kong property recovery faces new risk as Beijing widens offshore tax net

Testing times could lie ahead for Hong Kong’s property market if Beijing’s crackdown on offshore wealth extends to offshore rental income and capital gains tax, affecting investors. Photo: Sam Tsang

Business

Property

Banking & Finance

Companies

International capital is circling China’s property sector, testing valuations and chasing returns after years of strain


International capital is circling China’s property sector, testing valuations and chasing returns after years of strain.


.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}International capital is circling China’s property sector, testing valuations and chasing returns after years of strain

International capital is circling China’s property sector, testing valuations and chasing returns after years of strain