China's Anbang Insurance Group was among America's largest Chinese investors last year. The company flocked to U.S. real estate with a vengeance in 2016, grabbing properties worth billions, including Blackstone Group's Strategic Hotels portfolio for $6.5B. But that investment pace may stall this year.
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Chinese regulators have pumped the brakes on Anbang's overseas investment activity and will be scrutinizing how the firm, and other companies like it, are raising capital for foreign investment.
Regulators banned two of Anbang’s lucrative high-yield products last month, which recorded sales 48 times higher than in the year prior and hit $5.8B in March 2016, the Wall Street Journal reports. The government also said it would not approve new Anbang products for three months, which could slow the pace of Anbang’s foreign acquisitions while delaying its plan to launch an international bond offering. The Journal also said government scrutiny is likely to stall Anbang Life Insurance Co.’s future stock market listing.
Chinese investors poured a record-breaking $19.2B into U.S. real estate last year, and office and hotel assets were their favorite grabs. Out of $19B, investors paid a combined $16.1B for office and hotel real estate
Anbang in particular spent over $12B on acquisitions in 2015 and 2016, according to Dealogic, including its purchase of the iconic New York-based Waldorf Astoria hotel for $2B in 2015. While Chinese investors have not given up entirely, Dealogic said overseas Chinese investment fell to $49.5B so far this year, or about half of what was spent at the same time last year.
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