Industry News
Chinese investors growing appetite for UK real estate market post-Brexit

Since the Brexit referendum in June 2016, Chinese investors’ interest in the UK’s real estate market has surged, with demand for both commercial and residential property reaching record highs.

 

The depreciation of the pound after Brexit referendum has created a golden opportunity to purchase property in the UK at a discounted price, and this was a significant factor driving the demand. According to data from CBRE, Chinese investors spent 3.96 billion pounds on London commercial property in the first half of 2017, which outperformed the 2.69 billion pounds spent in the whole of 2016. One of the most famous examples of the trend is, in July 2017, the most expensive building in London “The Walkie Talkie” was purchased by Lee Kum Kee, a company well known for making Chinese cooking sauce. Also, in early 2017, the Leadenhall Building, a commercial skyscraper commonly dubbed the 'Cheese grater', was bought by a Chinese real estate brand CC Land for 1.15 billion pounds.

 

China now has a very high number of millionaires, and many high-net-worth individuals are looking into diversifying their investment. However, the house price in first tier cities such as Beijing, Shanghai and Shenzhen has become somewhat unreasonable, and considering the 70-year maximum property purchase lease, it’s not surprising that many high-net-worth individuals are looking into other real estate investment options. Andrew Hay, Global Head of Residential Division at Knight Frank said, compared to 3 years ago, Chinese buyers now account for at least 15 percent more new residential property transactions in London. In addition, Chinese homebuyers are able to get mortgages in the UK up to 70 per cent of a property’s value.

 

Apart from London, Chinese investors are also interested in other cities in the UK. In late 2016, Country Garden, a Chinese property development company signed a preliminary agreement to invest up to 2.2 billion pounds in the UK’s second largest city, Birmingham. Additionally, a Chinese consortium planned to build a luxury country manor hotel and up to 150 villas near the town of Ashford in Kent.

 

As the UK looks to make the best of post-Brexit life, the country hopes interest from Chinese investors will remain at a similar level in 2018.

 

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