Brexit is never out of the headlines good or bad it is a hot topic that contested heavily within investment circles, and the way negotiations are going the subject is here to stay, well for a good while anyway.
There is mixed reviews on the impact Brexit has had on the UK property market, one thing is for certain is has most certainly not scared off overseas investors.
Take the Chinese for an example, according Reuters Chinese investment in London commercial property has risen three fold since the Brexit vote, with most of the investment capital coming via Hong Kong this could soon slow down with the recent intervention from the Chinese government regarding overseas investment.
Investors hailing from Hong Kong snapped up the iconic skyscrapers the “Cheesegrater” and “Walkie Talkie” buildings.
H1 2017 saw 3.96 billion pounds ($5.10 billion) spent on London commercial property from Chinese investors, according to data from the CBRE real estate group, the highest amount on record and significantly more than the 2.69 billion GBP spent in 2016.
Hong Kong accounted for 92 percent of the Chinese investment, according to the Knight Frank agency.
With Beijing cracking down “irrational” overseas investment, so many investors are going via Hong Kong.
“Deals from mainland China already make up a smaller proportion of the activity from the region, with Hong Kong investors most active,” said Anthony Duggan, head of capital markets research at Knight Frank. “We expect that Chinese investors will still look to make strategic real estate purchases that fit within their business plans.”
Hong Kong operates under a different financial and judisicial system than that of mainland China, an agreement made between Britain and China before the territory was handed back, many feel that this is under threat.
“If you’re concerned that China is taking control of Hong Kong more and more and you need to take capital out of that jurisdiction, London is attractive,” said Chris Brett, head of international capital markets at CBRE (CBG.N).
“Cheaper money, the rule of law, cultural familiarity and a need to diversify out of a home market is what’s driving Hong Kong demand in the UK,” said James Beckham, head of central London investment at property consultant Cushman & Wakefield, which advised the Walkie Talkie’s buyers and Cheesegrater’s sellers.
Real estate sources said other City of London landmarks, including 30 St Mary Axe – known as the Gherkin – and the Heron Tower are also attracting interest from Hong Kong investors. These prime “trophy” assets, like the Cheesegrater and Walkie Talkie, have well-known tenants and are in limited supply.
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