Chinese property and development Investors not spooked by Brexit fears

Updated: 2016-11-11 19:45

By Bo Leung in London(

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Major Chinese property investment deals are still forging ahead in Britain as China's appetite for the UK property market remains strong, despite fears that buyers may turn their back on the market because of Brexit.

In a sign of post-Brexit confidence and that London is open for business, Chinese developer ABP, together with China's state-owned CITIC, have agreed to invest around 300 million pounds for the first phase of the 1.7 billion pound project at the Royal Albert Docks in East London.

Four Chinese banks will provide 1.2 billion pounds and ABP's development partner, Thailand's Charoen Pokphand Group, will hold a 25% equity in a platform company –The East London Development Group.

ABP Chairman, Xu Weiping told an East London-China Investment Summit: "These major investments are a vote of confidence to the UK and London market following the Brexit vote. ABP is delighted to be working alongside CITIC Group and Charoen Popkphand Group, two of Asia's biggest enterprises, to deliver the Royal Albert Dock project.”

It's expected that some 30,000 jobs will be created upon completion and it's been hailed as the third financial hub of the city, following the likes of City of London and Canary Wharf.

And that project is just one of many that Chinese companies have invested into in London's market.

Sino-Australian investment firm ASF, meanwhile, is one of three shortlisted bidders for the regeneration of the Albert Island site in the Royal Docks area.

Last week, China's third-largest developer Greenland Group vowed to go ahead with building the Spire in West India – set to be the tallest residential building in Europe – whatever the outcome of the Brexit negotiations, at a cost of 800 million pounds and it is scheduled for completion in 2020.

Also Asian Growth Properties Limited purchased an office building in London for around 154 million pounds and there's also the Wanda One hotel and a residential project south of the Thames by the world's largest property developer, Dalian Wanda.

With property cooling measures being introduced by Beijing and the pound falling to a 31-year low, Chinese property investors have been seizing the opportunity to snap up commercial properties and luxury homes in London.

According to estate agents Hamptons International the interests for prime central London property has increased to 12 percent in the third quarter of 2016 up from 2 percent in the previous with buyers from China making up the numbers.

Speaking to China Daily Sir Tom Troubridge, Chairman of China Business Group at PricewaterhouseCoopers said real estate in London and the rest of the UK is an attractive investment: "Real estate is 20 percent cheaper, so undoubtedly investors are taking the opportunity because of the weak pound.”

"The pound will probably strengthen, depending on how the relationship with the UK and European Union will develop over the next year or so. But my guess is that investors realised that the UK is still fundamentally a strong economy and the pound will start to strengthen again.”

According to property consultancy Frank Knight in the six months leading up to the brexit vote, Chinese buyers poured $1.7 billion into London commercial property, a 75 percent rise from a year earlier.

Senior Capital Investment Advisor for the Department of International Trade, Sir Edward Lister said it's not just because of a weak pound that's attracting investors.

"There were big Chinese investments long before the pound drop in value, of course it drives investors, but you should not regard that as the only reason. Currencies move, currency always moves, it's about the property, does the property go up in value, does it give you a good yield, is it secure?,” he told China Daily. " London and the UK ticked the boxes and the reality is in London there are very strong property laws here, stronger than pretty much anywhere in the world and as an owner you're well protected.”

"A London investment is very secure as well as profitable,” Sir Edward added, "And many Chinese people come here because of the English language, the British education system which is important to many of them and that helps drive their decision into why they want to invest and come here.”