Chinese Investment in London Real Estate a Top Global Trend

Chinese investment in UK real estate didn’t just make headlines in China last year, according to one recent report, the flow of Chinese wealth into downtown London is a top global trend.

Chinese investors were behind a number of attention-grabbing London property acquisitions in the last 12 months, most recently with Shanghai’s Greenland Group picking up two $900 million properties in London during the first week of January. Greenland rival Dalian Wanda had led the way in June last year, with plans for acquisition of the $1 billion One Nine Elms project along the south side of the Thames.

Even China’s sovereign investment fund had gotten in on the buying spree, picking up a London office park from new friend Blackstone for $1.28 billion in November.

Now, according to a Forbes story by Shanghai Bureau Chief Russell Flannery, China’s acquisitions can be considered a top global trend of 2013.

Forbes spoke with Stephen Clifton, head of Central London for real estate consultancy Knight Frank, who expects Chinese buyers to continue to be a force in London as the firm predicts that a number of conditions favor additional investment from China.

According to Clifton,

We see (Chinese) property companies and institutions targeting London and they will consider a wide range of asset types and projects. The occupational market has seen an exceptional recovery since the global financial crisis. In 2013 alone, there was 13.6 million square feet of office space acquired by Central London tenants, a 41% increase on the previous year, and we expect levels to continue to rise alongside the ongoing economic recovery. At the same time, the supply of office space is falling. We see opportunities for Chinese investors in both the acquisition of well-located, long-let, quality stock and also in joint ventures.

A research report released in December by Knight Frank rival Jones Lang LaSalle showed that Chinese investment in London real estate has already risen over 1500% since 2010, increasing from US$88.2 million to over US$1.63 billion at the end of quarter three of 2013.

This increase means that Chinese investment in London real estate now accounts for more than 50% of the total figure for Chinese investment in Europe during the first 11 months of last year, which amounted to US$3.1billion by December 1st.