Increase in Chinese commercial property investments in London
Real estate investors from China are increasingly looking to invest in commercial property in London.
Chinese investors are exploring new avenues and ventures, which is drawing them to the booming commercial property market in London according to a report by King Sturge.
“An increasing number of Chinese investors and occupiers have firmly set their sights on the City and Chinese occupiers and investors are now starting to represent potentially the biggest opportunity for the City office market,” says senior research associate at King Sturge, Deborah Hayward.
London has seen a huge increase in interest for commercial property, especially in grade A office space. Most of the investors were from the US and Europe, however now investors from China are looking at diversifying their portfolio. They have been attracted to the capital by the lower rents and property values in the current market.
Songbird PLC, the majority owners of Canary Wharf were supported heavily by China Investment Corporation, who helped to pay off their £880 million loan from Citigroup.
The Bank of China is also reported to be increasing its market presence in the UK, so will also be looking for space to expand into. In the past year Bank of China have already doubled their office space in London, moving to larger premises with 115,000 sq ft of office space and also letting out a smaller property in Cannon Street.
Another Chinese bank, Industrial & Commercial Bank of China, has been reported by King Sturge to be looking for another 100,000 sq ft of prime office space in London.
Real estate finance partner at law firm Reed Smith Paul Johnston says, “We have heard of top Chinese banks providing funding for large real estate purchases in New York and at the same time increasing their office space in the City of London. Other major Chinese banks are rumoured to be considering similar moves,
“With many banks having either withdrawn from the real estate debt markets on both sides of the pond or having pulled in their horns, it’s clear that some of the leading Chinese players see this as their opportunity to enter markets desperate for new funding sources,”
The more interest from around the world for the commercial property market in London, the more investment opportunities can open up in the city. This will mean more money for new developments helping the capital reach its full potential and increasing sustainable and stable financial growth.