Global property investors see signs of recovery in China, but wary of oversupply: JLL

International investors who have seen early signs of recovery in mainland China’s office and retail property markets are expected to start buying when oversupply concerns are eased, according to global real estate firm JLL.

Stuart Crow, JLL’s CEO for capital markets in the Asia-Pacific region, said foreign institutions would fall back in love with mainland property assets when new supply was absorbed by fresh take-up.

“International investors are waiting for the real economy to really absorb those commercial property spaces,” he said. “Probably we need to be a little bit more patient for the China value recovery.”

Crow added that a balance between fresh supply of space and take-up was emerging in the world’s second-biggest economy, with oversupply concerns eased, but big institutions like real estate funds and insurers would not return unless commercial properties could generate sufficient income.