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What are your thoughts on this?

  1. Will Chinese investment continue?

    2 vote(s)
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  2. Will Chinese investment decline?

    0 vote(s)
    0.0%
Multiple votes are allowed.

The Future of Chinese investment into UK Properties

Discussion in 'China property' started by Edward Zhang, Sep 3, 2017.

  1. Edward Zhang

    Edward Zhang New Member

    In December 2016, Beijing introduced new legislation to curb foreign investment by Chinese firms, nonetheless, making investment by foreign firms easier with little restriction. This raises many question for the future of Chinese investment into UK properties. Will the Chinese reduce their spending in the UK? I believe Chinese outward investment will not slow down, there are other ways around this crackdown. So far, the crackdown has been 'selective' targeted China's larger companies. Such as HNA, Dalian Wanda Group, Anbang Insurance Gorup and Fosun International, forcing such companies halt their purchases, sell their overseas asset or invest domestically. Chinese investment in UK properties is still bright, despite government restrictions.

    In 2017, Chinese investors snapped up two of London's most prominent skyscrapers the 'Walkie Talkie' sold to Hong Kong firm Kum Kee for £1.3 Billion, and
    Chinese investors snapped up London’s well known skyscrapers- “Walkie Talkie” (Sold for breaking £1.3Bn- paid by Hong Kong firm Lee Kum Kee) and CC Land Holdings Ltd, which is controlled by property tycoon Cheung Chung-kiu, bought 'Cheesegrater' for £1.135 billion. Despite, government restrictions there are still ways around such measures. Many investors from mainland China tend to divert its asset and capital to Hong Kong and from there they are free to invest around the world. We can noticed political suppression in Hong Kong by Beijing, the little territory is still however governed by the 'Two-Country-One-System', there is still greater freedom both socially and economically.

    During the summer of 2017, I helped to set up a business event for Atlas Blue Property on persuading chinese investors to the UK, they claim that its is 'the safest option' and 'London is London'. The turnout was quite impressive, which drew interest from potential investors also competing companies.

    Here are some facts and figures to demonstrate the Chinese investment in the UK property industry will continue to grow:

    • "Capital from China and Hong Kong has accounted for a third of all investment in London commercial real estate this year, up from less than 10 percent before the referendum, according to CBRE."
    • "Chinese investment is declining in the US whereas it is growing in the UK, according to JLL"
    • "China own issues: Record Hong Kong commercial and residential property prices, along with the political concerns are pushing investors to turn to overseas markets where rental yields are higher."- Guardian News
    • "Sterling's 12 percent drop since the Brexit referendum against the U.S. dollar - to which the Hong Kong dollar is pegged."-Guardian News
     
  2. realdeals

    realdeals Member

    A mix of consolidation and concern in the UK property market together with the "exchange rate bonus" will keep Chinese investment coming to the UK for a while yet. The only possible issue is that the Chinese authorities are not giving up on their mission to limit investment funds leaving China.
     
  3. Longterminvestor

    Longterminvestor Active Member

    Chinese investors have helped to support UK property prices in recent times. How long this will continue for is anyone's guess.
     
  4. diyhelp

    diyhelp Active Member

    If Chinese overseas investment was cut stone dead overnight (not going to happen) what impact would this have on property markets such as the UK, Canada, US, etc?

    Don't under estimate the power of Chinese investment - the UK has certainly benefited from the currency movement.
     
  5. Longterminvestor

    Longterminvestor Active Member

    The next wave of investors will surely be dollar denominated after the 20% fall in the value of sterling against the dollar, post Brexit vote.
     
  6. diyhelp

    diyhelp Active Member

    Hi John,

    Which other areas of the world, apart from China, will likely show interest in the UK property market going forward?
     
  7. realdeals

    realdeals Member

    Again the London market is very different to the rest of the UK because the vast majority of prime London real estate seems to be owned by overseas investors.

    This issue about overseas investment in general reminds me of the recent witch hunt in Australia with politicians blaming overseas investors for pushing up prices. However, an investigation by the Australian government found (like your mentioned above John) that overseas investment has minimal impact in general - only on the margins if anywhere.
     
  8. lookinginvest

    lookinginvest Member

    I assume that with the ongoing conflict between China and the USA, some Chinese investors will be looking for alternatives to America? While there is confusion regarding Brexit and the UK property market, long-term investors must surely be looking towards the UK again? When you also factor in the currency exchange “bonus” of recent times, this surely helps to alleviate any long-term concerns?
     
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