Chinese investors cannot get enough of foreign commercial property, recent figures suggest, adding to data from other sources about investment flows.

Chinese overseas investment in commercial property set a record of $38.3 billion in 2016, surging by 49 per cent from a year earlier, adding to other recent evidence that outflows of capital continue from the Asian giant.

The figures come from DTZ/Cushman & Wakefield's China Outbound Capital Watch report for the fourth quarter 2016. The property services firm predicts that outflows from China will remain strong, although notes the country is trying to curb such moves.

The US was the top overseas destination, recording a more than fourfold increase from 2015 to $18.3 billion. Chinese investment also increased in Hong Kong, South Korea, the UK, Canada and Germany. In the UK, investment volume jumped 32 per cent from a year before, with the fall in sterling after the June Brexit vote making UK property cheaper and hence more attractive, the report said.

"Many Chinese investors believe there is still some growth left in the US dollar’s appreciation to the yuan whereas some other major global currencies may seem to carry more risk of decline. At the present time it would appear that for major corporate investors the US will see a greater impact on real estate investment volumes from China depending on the stance adopted towards China and Chinese investment by the incoming US president,” said James Shepherd, DTZ/Cushman & Wakefield’s managing director of research, Greater China.

China has opened up its property markets, and its newly-affluent middle class, wishing to spread risk and possibly avoid dangers in future in the Communist-run country, have invested considerable sums overseas. For example, China-based Hurun, the research organisation, recently reported that almost half of high net worth Chinese individuals put stock into overseas investments. The Hurun Research Institute and Visas Consulting Group in late October 2016 jointly published a 28-page report on immigration and investment partners of Chinese HNW individuals. It found that the US West Coast is the most attractive destination for Chinese HNW individuals to settle in, particularly Los Angeles, San Francisco and Seattle. Hurun has also found that 60 per cent of HNW individuals in China are planning to buy real estate in other countries over the next three years, seeking to get at least a third of their wealth out of the country. (To see an editorial noting a paradox around Chinese HNW individuals leaving the country, click here.)

Among other details, the office market absorbed the lion's share of Chinese outbound investment, at just over 45 per cent, according to the DTZ/Cushman & Wakefield report. Hotel deals surged 13 percentage points over 2015 to capture a 27 per cent share of investment at $10.3 billion, a surprisingly high level that may be difficult to match in 2017.

Investment in development sites fell 18 percentage points from 2015 to account for a 15 per cent share. The retail sector recorded 3 per cent of transactions, while senior housing emerged with a 2.5 per cent share of investment and seems set to grab additional capital ahead.

The report noted that as a result of a fall in China’s foreign exchange reserves, the country tightened curbs on overseas investments last November, and increased scrutiny on currency exchanges of the permitted $50,000 annual quota for individuals. The new measures include banning deals over $10 billion; curbing deals of more than $1 billion in sectors unrelated to a company’s core business; and curbing real estate investments of more than $1 billion.

“Demand for outbound investment will likely remain strong in 2017 as Chinese investors continue to look for diversification on the back of the expectation of lower cap rates of core assets in China. Nevertheless, the recent government controls on capital outflows will likely lengthen the time it takes to complete a transaction, and as a result we expect deal volume to decrease slightly in 2017," added Catherine Chen, senior manager and head of capital markets research at the company.