Chinese investment in London property to rise – Savills
Savills expects to see an increase in the level of Chinese money into the London property market and elsewhere around the world, following the recent relaxation of regulations by the Chinese Insurance Regulatory Commission. The firm thinks this could lead to as much as £10bn of new inward investment to the UK capital, which is already a top attraction for overseas investors.
Investors from abroad accounted for 76% of property investment transactions in the City and 67% of investment deals in the West End last year, according to new research from Savills. This compares with totals of around 60% in both markets in 2011.
The total transaction volume for the City property market was £8.9bn, Savills calculates, while the figure for West End property was £6.1bn. Asian investors were the most active in the City, accounting for £2.27bn of transactions, while in the West End it was investors from Europe who took the lead, accounting for £1.55bn of deals.
Not all the investment action came from overseas, however; UK investors accounted for 24% or £2.17bn of market share in the City and 33% of £2.02bn in the West End, according to Savills’ calculations.
Stephen Down, head of Central London investment at Savills, says that while overseas investors have generally been seeking larger, prime properties let on longer leases, with secure income and a lower yield, domestic investors in Central London have been more focused on smaller lot sizes that are multi-let. This could include secondary properties, where they can seek to work the asset and then remarket it, he notes.
