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Why are Chinese investors the biggest spenders on UK property?

RWinvest
21 March, 2018

China calling

The UK property market is definitely on China's list, with Chinese investment in commercial property growing...rapidly. For some is Asian investors, the UK market is almost seen as irresistible. And it's easy to see why.

China is the world's second largest economy and amongst the country's priorities is the expansion its overseas property portfolio.

The first six months of last year saw Chinese investors spend £3.96 billion pounds on London commercial property. The highest amount on record, outshining the £2.69 billion pounds spent during 2016, as reported by CBRE international real estate group. But why is this? International property investor analysts claim there are several reasons drawing-in the investment from this part of the world. One of which is the significant 15 percent drop in Sterling against the U.S. dollar, which many Asian currencies are pegged against when the official announcement of Brexit was made.

Even without the threat of Brexit, Chinese investors understand the value of a property and where it's located in the world is crucial. Property in big cities across Britain is attractive, giving a good return on investment, and a tendency to offer higher rents than other global cities of a comparative stature.

While some overseas investors have pulled back from investment in British property, others, largely from Hong Kong, are seeking out opportunities and snapping up what the UK market has to offer. Investors from Hong Kong account for 92 percent of Chinese property investment, according to data by independent real estate consultancy, Knight Frank.

China's North West links

In the North West Chinese investors continue to make cities such as Manchester and Liverpool a priority. Using them to base their business, make international links, and create growth - whether that's through the purchase of a commercial or residential property. For more information about residential properties in the North West view here at RWinvest.

The North West has a good business track record with China and this continues today. IP Global, a Hong Kong-based residential property investment company, states that last year it's devoted £106 million in Northern Powerhouse cities, such as Liverpool and Manchester on behalf of clients. And it expects to invest a further £200 million this year. A promising start to 2018 for the North West, but relationships and ties with Asia are not new. Liverpool is a city that's seen plenty of investment come in form China. It has a good and prosperous relationship is with China and Shanghai which is set to increase bringing greater benefits for the city. For example, Liverpool city centre's Paramount development – currently under construction - is one of the projects which attracted investors from China and Hong Kong.

Manchester's also has strong ties with China. This is demonstrated by Manchester China Forum's recent win: awarded for its Outstanding Contribution to UK-China Relations. The Forum – a business-led initiative – was set up to increase Greater Manchester's commercial links with China. Over the last five years, their work across the region has helped to make Greater Manchester a go-to place for property and business investment. With Chinese investors alone now involved in over £3bn worth of development across the city.

Future foreign investors

The UK property market has plenty going for it. It has traditionally offered overseas investors' stability that hasn't always been available in other countries. And this, amongst other reasons, is why future investors, whether from China or further afield, will continue to view it as a top destination for property investment.

Of course, property prices (across any part of the world) fluctuate according to market conditions, but a long-term investment in the UK generally assures long-term capital gains for foreign investors. This, in part, is due to the UK's transparency around a property, and covers areas including policy, sales, regulations, tax structure, and property safeguarding. All of which are core factors for large property investors. Add to this, the way Britain and rental yields correspond. The excellent rental yields offered in areas of the UK, particularly in the North West, make the UK very appealing.

For information on property investment opportunities contact RWinvest on +44 (0)151 808 1250 Email: info@rw-invest.com or visit our website.


Tags: Asia | Shanghai | London


About the Author


RWinvest

With over 14 years of experience, RWinvest is a market leading UK property investment company with offices in London, Liverpool and Manchester. We specialise in buy to let investment and offer our clients support in buying rental property, providing them with exclusive access to high quality residential and student new build properties across the Northern Powerhouse. www.rw-invest.com

 

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