Chinese investment in Australia has shifted tremendously to commercial real estate, more than tripling in a year.
The 2014 report on Chinese investment in Australia, released on Monday, also showed that, for the first time, Chinese private sector investment exceeded state-owned enterprise investment, both in terms of volume and value.
The KPMG/Sydney University study showed Australia remained one of the largest recipients of Chinese direct investment across the world.
For the first time, nearly half (46 percent) of Chinese investment in Australia was concentrated in commercial real estate transactions last year, up from 14 percent in 2013.
Almost 4 in every 5 dollars of new Chinese business was in commercial real estate, infrastructure and the leisure and retail industry, accounting for a seismic shift away from mining (11 percent), where the resources construction boom has ended.
Four transactions in Australia were valued at over 400 million U.S. dollars, however total Chinese investment in the country has declined for the second consecutive year.
Chinese outbound direct investment was 8.35 billion U.S. dollars, down 9.1 percent from 9.19 billion U.S. dollars in 2013.
New South Wales, Australia's most populous state and home to the nation's financial center, Sydney, took the lion's share of Chinese investment with an overwhelming 72 percent of total investment.
Report co-author, Doug Ferguson, head of KPMG Australia's Asia Business Group, said Chinese investors were keeping the long term in mind when choosing where to invest.
"It is not surprising to see that Chinese companies' investment destinations are changing, from resource rich developing countries to developed countries providing access to advanced technologies, established brands, extensive industry experience and worldwide distribution networks," he said in a statement on Monday.
"While the trend away from resources has led to a decline in Chinese investment in Australia, the trend towards real estate, leisure, advanced technologies, food and services works in Australia's favor for the longer term."
The report identified the recently-signed free trade agreement between the nations, the falling Australian currency and low cost of debt, and improved visa programs for large investors as developments that ensure Australia remained an attractive destination for Chinese money.
A "new normal" in Chinese outbound direct investment in Australia had eventuated, according to report co-author Hans Hendrischke.
"In our 2013 annual update report, we observed that Chinese direct investment in Australia had reached a turning point away from resources towards real estate, infrastructure, and consumer sectors. This trend has continued in 2014," said report co-author Professor Hendrischke, professor of Chinese Business and Management at the University of Sydney Business School.
"Under this 'new normal' scenario Chinese companies are expected to continue to invest over 90 billion U.S. dollars into Australia in the next decade."
The proposed federal government changes to foreign investment in private real estate may not have their intended affect, according to commercial property agent Knight Frank. It said in the report the changes were "unlikely to deter the large-scale development and investment into commercial and residential markets " by Chinese investors.
