Think of Australia as an experiment for Chinese investors. Turns out that this experiment quickly turned into investment sprees by high net worth chinese, banks, developers, and institutional investors.

Mature markets in the US, UK and Australia are rapidly attracting capital out of China providing better products and higher returns, thus helping Chinese investors to brand themselves internationally. The first presence of Chinese capital in Australia came from sovereign wealth funds, banks, and private equity funds investing in core office assets in the Sydney CBD.

Many large developers followed this trend trying to create diversification with overseas presence. KPMG partnered with The University of Sydney to give a more detailed account of Chinese Investments in Australia.

Here are some of their findings:

• Cities seeing the most activity from Chinese investors include Sydney and Melbourne. These cities are pulling in more investments from Chinese investors compared to New York and London.
• Chinese developers are looking into cities that are offering discounts on prime property such as Brisbane, Gold Coast and regional suburbs of NSW.
• For the first time almost half of all the Chinese investment was in commercial properties.
• Also for the first time Chinese private sector investments exceeded  state owned enterprise investments in a number of deals.
• NSW attracted 72% of investments.

Australia managed to maintain its position as the second largest recipient country of direct Chinese investment, with the US in first position. Chinese direct investment in Australia was mainly focused on commercial real estate versus residential.

A major push for an increase in investments came from a significant easing of overseas investment policies.

There has also been an increase in a third wave of equity investors and insurance firms whom are seeking yield driven opportunities.

Then 7 of the top 10 Chinese Developers have made off shore investments and are heavily active in the Australian market.

The findings provided by KPMG and The University of Sydney make it clear that China has a strong vested interest in the Australian commercial real estate market and research indicates that this trend will continue to grow.