The UK still remains a highly attractive investment for the Chinese

Despite the upcoming EU referendum in June, Estate agent Savills doesn’t expect this to have any effect on commercial property investment with Chinese investment set to exceed last year’s levels.

Safe haven

Richard Carr image of Leeds

The UK’s commercial property sector continues to attract overseas investors

Last October the Chinese President made a state visit to the country and following it the UK’s commercial property market was described as a “safe haven” for Chinese investors.

And they have heeded the advice!

A staggering £560.3m of Chinese transactions have already been made in the London commercial real estate market since the beginning of the year to the end of February.

During the state visit, PM David Cameron visited Manchester with Chinese President Xi Jinping and said the north of England would create new partnerships with China to unlock the potential of the northern powerhouse.

Key investments

Two major Chinese investments makes up over half of the total invested during the first eight weeks of 2016.

  • Chinese state-owned real estate investor, Poly Real Estate, completed its first purchase in London during January acquiring Ludgate West, 5 Fleet Place for £145m.
  • China Overseas Land and Investment’s purchased Helicon Building, South Place in February also for £145m.

London

Rasheed Hassan, Head of Savills Cross Border Investment, commented to developmentfinancetoday.co.uk: “Although there is a significant amount of capital chasing London real estate, with a finite level of supply, there are still a number of assets available which offer an attractive yield profile.

“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’re 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.”