Institutions in China invested 17% more money in overseas property in the first half of this year. Simon Morris is an independent, London-based property expert who acts in an advisory capacity to UK property investment funds on how best to reap high returns from their property portfolios. In this blogpost he looks at the details China’s investment in UK property.
Chinese investors are now looking outside of China for investment opportunities. China’s property market isn’t a great investment at the moment due to tight financing and high inventories. Like a lot of investors the Chinese seem increasingly drawn to the London property market.
Chinese institutions looks to London
Chinese institutional investors are looking at both commercial and residential property, with an estimated £1.35 billion worth of Chinese investment split between these sectors. London is second only to San Francisco and Chicago in the Chinese property investment stakes. Sydney and Madrid sit in fourth and fifth. Spain’s largest bank, Santander sold a historic skyscraper to China’s largest commercial developer recently, the deal was worth $361 million.
Developers and insurance companies remain the busiest investors with an increasing interest in hotels and hospitality outlets in areas that are popular with Chinese visitors to London and other global gateway cities.
Measureable impact on demand
Commercial and residential property in the capital is hot ticket for investors at the moment. I’ve blogged before about commercial property showing massive growth in 2014, it looks like Chinese institutional investors want to take advantage of the potential still left in the market.
There’s no doubt that the sums talked about will have a measurable impact on demand for property in London, however, it’s not just the London market that is booming. The shoots of recovery in commercial and residential property are now being felt all across the UK.
Feel good factor
As the country moves out of the recession, the feel good factor is returning to investors. This, combined with the influx of foreign investment into the buoyant UK market makes market conditions positive. Confidence is returning to a market that was badly affected by the credit crunch.
There is a genuine caution attached to all this, people are wary of a bubble in the South of the UK, however, many investors still believe in the strength of this market and the opportunities for more growth.
Learning about the property market
There’s so much interest in the property market and property investment funds and bonds at the moment that I’ve launched the Simon Morris Property Investment Guide. It’s a free guide that you can read online or download. The guide is designed to help regular readers of the Simon Morris blog to get their head around the different types of investment.
It’s always vital to take advice from an independent specialist before making any investment, it’s also vital to measure your exposure to risk. If you want to learn more about investing in property read the guide and then, like all discerning investors, make sure you do plenty of research before making a decision.