Asia Pacific interest in Vancouver growing

Vancouver has emerged as the top investment destination from the Asia Pacific in Canada as investment in Calgary’s oil and gas sector has declined, states a new report by the Asia Pacific Foundation of Canada (APF Canada).

Inbound investment into Vancouver has more than tripled against its own previous performance, in comparison to the previous four-year period, stated the APF Canada annual Investment Monitor report.

The report which delves into two-way foreign direct investments between Canada and the Asia Pacific stated that Vancouver also set a record high number of inbound investment deals for the last 16 years with a stunning 67 deals from 2015 to 2018.

“The increasing significance of the Asia Pacific as the driver of the new global economy underscores the need for Canada to strategically deepen and diversify its two-way investment links with this vital region,” said Stewart Beck, President and CEO of APF Canada.

“As Canada pivots to new Asian markets as part of its national trade diversification strategy, both policy-makers and the public have begun turning their attention to the foreign direct investment (FDI) flowing in and out of Canada,” he said.

Asia Pacific investors remain most interested in the Vancouver-headquartered mining sector in terms of investment value. From 2003 to 2018, the city’s mining sector has seen 20 inbound investment deals, which totalled more than C$4.6B in investment from the Asia Pacific. Vancouver also saw another high-profile investment deal in 2017, when a subsidiary of the Chinese Anbang Insurance Group Company Limited invested C$1.0B to acquire a majority stake in Vancouver-based Retirement Concepts, which owns and operates 24 retirement communities in BC, Calgary, and Montreal. However, in 2018 the Chinese government seized ownership of Anbang and all its subsidiary businesses.

While discussions on investment in Vancouver often centre on real estate, they typically focus on housing, and not broader FDI across the real estate and services sector overall. In all, C$1.8B in foreign direct investment has flowed from the Asia Pacific into Vancouver’s real estate and services sector, the majority of which was a C$1.0B acquisition by Anbang of a controlling interest in Vancouver’s Bentall Centre towers.

While Vancouver tops the charts as the top investment destination, the report’s analysis found 60 per cent of all investment deals in Canada from Asia have gone to cities outside of Vancouver, Calgary, or Toronto. 

Over the past 16 years, Asia Pacific investors have invested C$121.3 billion across 905 deals made in 165 Canadian cities – most of those investments made outside of Canada’s largest urban centres.

This was one of the key findings of APF Canada’s Investment Monitor Report 2018 on city-level foreign direct investment (FDI) between Canada and the Asia Pacific.

Additionally, the report finds that Canadian companies have more than kept up with the pace of their Asia Pacific counterparts, investing C$209.4 billion over 2,188 deals in 465 Asia Pacific cities between 2003 and 2018.

Australia remains the go-to destination for Canadian investors, with four Australian cities ranking among the top 12 destinations for Canadian investments.

Highlights of the Investment Monitor Report 2018 include:

• Canada received C$51.2 billion in FDI over 333 deals from the Asia Pacific between 2015 and 2018

• China (C$59.9B), Japan (C$34.5B), and Hong Kong (C$15.5B) are the top Asia Pacific countries of origin for FDI into Canada

• 11% of the 333 deals between 2015 and 2018 are from Asia Pacific state-owned enterprises (down from 35% between 2011 and 2014)

• Canadian companies invested C$63.7 billion over 437 deals in the Asia Pacific between 2015 and 2018

• Australia (C$64.7B), China (C$41.5B), and India (C$24.8B) are the top destinations for Canadian investments into the Asia Pacific

• Alberta, British Columbia, Ontario, and Quebec received 93% of Canada’s total investment from the Asia Pacific and invested 98% of Canada’s total investments in the Asia Pacific between 2003 and 2018

• Calgary (C$41.9B), Kitimat, B.C. (C$26.2B), and Vancouver (C$14.1) were the top three destination cities for investments from the Asia Pacific by value of investments

• Melbourne (C$18.5B), Sydney (C$16.7), and Hong Kong (C$11B) were the top three Asia Pacific destination cities for Canadian investments by value of investments

• Canadian investments in Beijing and Shanghai have dropped slightly while investments in other Chinese cities have risen between 2015 and 2018, compared to 2011 and 2014

When it comes to outbound investment from Canada into the Asia Pacific, drilling down to the city level reveals specific hubs for Canadian investment across the region.

Notably, Canada has invested over half a billion more into Gopalganj, Bangladesh (ranked sixth) than it has into Shanghai, China (ranked seventh); at eleventh and twelfth place respectively, Xuyên Môc District in Vietnam and the Gove Peninsula in Australia are just behind tenth place Mumbai when it comes to dollars invested. The diversity of Canada’s investment activity in the region stretches far beyond just the top 12, however: there are 465 distinct city-level destinations for Canadian investment across the Asia Pacific, from Adelaide to Zunyi.