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- June 1, 2010: Vol. 2, Number 6

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Proceed with Caution: Chinese Insurance Companies Could Wield Considerable Clout in Property Markets

by Alex Eidlin

While institutional investors are major players in real estate markets in developed countries, they have just started investing in property markets in Asia. In some countries, such as India, institutions are not allowed to invest in real estate for fear that large amounts of investment capital from institutions may inflate property prices, putting housing out of reach for ordinary people.

Investment regulations in other Asian countries are less prohibitive, and institutional investing, although not very big now, is represented there by different types of institutions. While insurance companies have been investing in real estate in most Asian countries for a number of years, they have been only recently allowed to do so in China. A change in regulations in China has enabled domestic insurance companies to join sovereign wealth funds and potentially become dominant players in property markets. The total capital that insurance companies have available to be invested in real

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