News: London property big draw for China investors
London property big draw for China investors
Nation’s growth, yuan’s rise make buys more affordable
The Straits Times. Published January 15, 2014
LONDON – Property in the British capital has become a magnet for buyers from China, with investments having jumped 1,500 per cent since 2010, the China Daily newspaper reported yesterday, adding that the trend looks set to continue.
The report came as state-owned Greenland Holding, the builder of one of China’s tallest towers, announced a £1.2 billion (S$2.5 billion) investment in two projects in London.
In its first UK venture, Greenland signed a deal to buy the historic Ram Brewery in Wandsworth, west London, which has an investment value of £600 million. The 3.2ha site has preliminary permission for a 36-storey tower with 166 apartments and 9,500 sq m of shops, bars and restaurants.
“London is at the economic centre of Europe, so investment here will have global influence,” Greenland chairman Zhang Yuliang said at a press conference in the British capital yesterday. “We plan to invest further – next in office, hotels and retail.”
Greenland will also build apartments on a 3,700 sq m site in the Canary Wharf financial district, it said in a separate statement yesterday.
“Due to the active trading in London local real estate market in the last two years, the average residential price rose by 10 per cent in 2013, and the increase in demand is expected to continue in 2014,” said Mr Zhang.
Research released last December by realtor Jones Lang LaSalle showed Chinese investment in London real estate has risen more than 1,500 per cent since 2010, up from £54 million to more than £1 billion at the end of the third quarter last year.
This increase means Chinese investment in London property now accounts for over 50 per cent of all Chinese investment in the rest of Europe, which stood at £1.9 billion last year, China Daily said.
The increase in investment has repositioned China as the third-largest non-domestic purchaser in the UK, behind Germany and the United States, it added.
Deals last year included Ping An Insurance’s purchase of the landmark Lloyd’s building for £261 million. Also, Dalian Wanda Group is investing £700 million to build a five-star hotel by the Thames. And China’s sovereign wealth fund, China Investment Corp, is reportedly in talks with US private equity group Blackstone to take over a commercial park in London in a deal that could be worth £1.28 billion.
Mr Jon Neale, head of UK research at Jones Lang LaSalle, attributed China’s overseas “gold rush” to its economic growth and the recent appreciation of the yuan, which has made overseas assets more affordable, the China Daily reported.
Mr Ed Stansfield, chief property economist at Capital Economics, told the paper: “The property market in London is a very attractive place to invest because of the UK’s reputation of having a sort of stable economy, a pretty stable political system and a high level of legal transparency.”
BLOOMBERG, CHINA DAILY/ASIA NEWS NETWORK