Europe

2016 will be record year for Chinese UK investment

MIPIM 2016: Chinese investment into UK commercial real estate this year will exceed 2015 levels, according to Savills.

The advisory firm said confidence in the market grew with the state visit of Chinese president Xi Jinping in October 2015 and Britain reinforced its status as an investment safe haven, in particular London.

Savills’ figures show £560.3m of Chinese deals were transacted in London between 1 January and 29 February, setting up volumes to exceed 2015’s £1.2bn.

Notable deals include Chinese state-owned real estate investor Poly Real Estate’s first in London, the £145m acquisition of Ludgate West, 5 Fleet Place, EC4, and China Overseas Land and Investment’s purchase of the Helicon Building, South Place, EC2, from Deutsche AWM for £145m in February.

The Chinese government’s capital liberalisation initiatives and long-term international global investment strategy, as well as London’s diverse investment opportunities, market liquidity and swift transaction times all act as drivers for Chinese capital, said Savills.

Rasheed Hassan, head of cross-border investment at Savills, said: “Long-term income streams, redevelopment opportunities and mixed-used schemes entering the market provide a variety of return profiles, which in turn attract an array of investors.

“In addition, the profile of the investors we are seeing enter the market includes Chinese developers who are seeking higher returning development opportunities, targeting mixed-use and residential-led schemes, rather than core assets within London.”

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