Chinese investment in central London property falls

Chinese investment into central London real estate has dropped to its lowest level in two and a half years as an influx of cash from mainland China and Hong Kong slows to a trickle.

Buyers from Hong Kong and China bought £482m of London commercial buildings in the first three months of 2018, according to the property consultants Cushman & Wakefield — a level last seen in 2015.

That followed a year in which Chinese and Hong Kong buyers poured close to £7bn into London property, including snapping up two of the capital’s best-known skyscrapers, the “ Cheesegrater”, or Leadenhall Building, and the “ Walkie Talkie” at 20 Fenchurch Street.

“On recent trips to Hong Kong I’ve noticed an increasing caution about the UK market,” said Bruce Dear, head of London real estate at law firm Eversheds Sutherland. “Their previous exuberance has quietened down a bit as they watch to see what will happen with Brexit and the UK economy in the autumn.” Outbound capital from the Chinese mainland has also been under greater scrutiny as Beijing looked to slow a global dealmaking spree.

“Trophy” office building acquisitions in the UK are among those in Chinese regulators’ sights, Cushman said in a separate report on outbound investment from China, which predicted investment volumes from the country into the UK would halve in 2018 compared with last year. “It’s more difficult for Chinese [investors] and some Hong Kong people to get their money out at the moment,” said Richard Divall, head of cross-border capital markets at Colliers International. “They’re not bidding as much as they were before . . . if anything we’re going to see some of them selling.”

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