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London’s biggest commercial investors of 2015 will be from China and US
Brief:Chinese investors spent £2.2 billion in London’s commercial property market in 2014.
According to Savills, Chinese and US money is set to dominate London’s commercial property market in 2015. The firm says that in 2014 Chinese investors accounted for more inward investment than all European buyers collectively at £2.2 billion

Savills data shows that of the £21 billion spent in the London market, £14.6 billion was attributed to foreign buyers equating to 70%. Within this analysis, the firm finds that US investors spent £3.4 billion, Chinese £2.2 billion with Qatari investors at £1.2 billion, Whereas the major investors in 2013 originated from Kuwait spending £2.1 billion, Singapore spending £1.7 billion and Hong Kong spending £785 million.

China Life was one of the biggest new entrants of the year with its deal at 10 Upper Bank Street. Chinese investors were the biggest buyer group from Asia, with developers such as Shanghai Greenland, Ping An Trust and China Overseas Land Investment purchasing properties. Savills also notes that these investors are not limited to single transactions, and anticipate more activity. US investors including Blackstone, Kennedy Wilson and Hines have secured some of the larger deals such as Alban Gate, 111 Buckingham Palace Road and 25 Cabot Square, with Northstar entering the UK for the first time purchasing a property in Woking before going on to purchase a 1.1billion euro portfolio which included four assets in London; Other new entrants, who Savills is acting for, include parties from Taiwan, Turkey, Singapore, Israel and Yemen.

Rasheed Hassan, director of cross border investment at Savills, says: “Debt is a significant factor in drawing in these international parties, falling swap rates and competition between lenders is making borrowing cheaper. Aside from that there is genuine confidence in the strength of the occupational market with rents steadily rising. These pull factors are further boosted by push factors such as the returns in the bond markets as compared to property and some economic instability across other geographies.”

Eric Zhao, Savills Chinese Capital Markets Specialist, adds: “Chinese investors coming into the UK market are mainly developers and insurance companies. The top Chinese developers are being driven by challenges in the domestic market and global branding needs. Insurance companies are beginning to diversify their huge capital outside of China after the restriction on overseas investment was lifted by the regulator. We have already seen the top Chinese firms make a statement in London and we are expecting more to follow.”

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