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London

Chinese investment in London real estate up over 1500% since 2010

Investment in London tops £1billion in 2013, accounting for over 50% of Chinese investment in Europe


LONDON 13 December 2013 – Research released today by Jones Lang LaSalle shows that Chinese investment in London real estate has risen over 1500% since 2010, increasing from £54million to over £1billion at the end of quarter three 2013.

This increase means that Chinese investment in London real estate now accounts for more than 50% of the total figure for Chinese investment in Europe, which currently stands at £1.9billion in 2013 YTD.

The increase in investment has repositioned China as the third-largest non-domestic purchaser in the UK, behind Germany and the USA which invested £1.2billion and £1.1billion respectively.

Damian Corbett, Head of Central London Office Investment at Jones Lang LaSalle said: “The rapid rate of growth demonstrates both the desire for Chinese investors to increase exposure to property assets and the high quality of stock here in London.

“Chinese sovereign wealth, insurance companies and high net worth individuals have been keen to place capital into buoyant overseas markets, with London very high on the priority list. We expect the pool of investors from China targeting London to grow significantly in the coming years. They will consider everything from urban regeneration sites through to trophy assets.”

Offices, retail and industrial units, hotels and mixed developments prove to be the most attractive asset classes to Chinese buyers. Key deals from 2013 include the sale of Lloyds building to insurance company Ping An for £261million, the sale of an Oxford Street retail unit to a private investor for £45million and significant investment in development sites such as Royal Docks and One Nine Elms.

Jon Neale, Head of UK Research at Jones Lang LaSalle said: “It seems likely that the role of Chinese investors will grow substantially over the coming years. Not only is the population enormous, but the pace of economic development – while slower than over the past decade – will still be unparalleled in human history. Coupled with high rates of savings and personal investment among the burgeoning middle class, this suggests that the assets and appetite of Chinese funds will increase accordingly. Most importantly, though, China is a rapidly ageing country, which suggests the tendency to invest will only increase. Given the huge amount of capital that is likely to be seeking a home over the next few years, and concerns over the performance of equities and gilts in the developed world, property in cities such as London is an obvious case. Our transparent market, the strength of our legal system and the lack of barriers to overseas investment are further benefits.”