Chinese buyers are now the second biggest foreign investors in London’s booming property market, having spent £2.2 billion ($3.32 billion) on real estate in the UK’s capital last year.
In a report published this week, UK-based property consultancy Savills found that foreign buyers now account for 70 percent of investment in the London real estate market, making up £14.6 billion ($22 billion) of the total property deals in the city during 2014.
China ranked second only to the United States among buyers of London real estate last year, with American investors putting £3.4 billion ($5.12 billion) into the city’s red hot property market last year.
Developers and Insurance Companies Take the Lead
Eric Zhao, Savills Chinese Capital Markets Specialist, commented that, “Chinese investors coming into the UK market are mainly developers and insurance companies.”
During 2014, mainland insurer China Life led an international consortium that acquired 10 Upper Bank Street on London’s Canary Wharf for £795 million ($1.2 billion) in June last year.
The mainland’s banks also liked London last year, with China Construction Bank acquiring 111 Old Broad Street in the city’s financial district for 110 million pounds ($187 million) in June.
More Chinese Investment to Follow
The numbers on 2014 foreign investment into London real estate show considerable change from 2013 when Kuwait ranked first among overseas buyers of London property with £2.1 billion ($3.16 billion) in acquisitions, Singapore ranked second with spending of £1.7 billion ($2.56 billion) and Hong Kong came in third at £785 million ($1.18 billion) in deals.
For 2014, investors from Qatar came in third with £1.8 billion in London acquisitions.
Chinese investors have started out 2015 with more London acquisition after Ping An Insurance picked up Tower Place as its second deal in the city for $490 million.
Savills said in a statement that it expects Chinese and US money to continue to dominate London’s commercial property market in 2015, with Zhao adding that, “We have already seen the top Chinese firms make a statement in London and we are expecting more to follow.”