Housing market in UK still shines

Chinese shrug off Brexit fears, betting on long-term stability in British real estate as they snap up property bargains

Major Chinese property investment deals are still forging ahead in Britain as China's appetite for UK property remains strong, despite fears that buyers might turn their backs 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 ($374.5 million; 348 million euros) in the first phase of the 1.7 billion project at the Royal Albert Docks in East London.

Four Chinese banks will provide 1.2 billion and ABP's development partner, Thailand's Charoen Pokphand Group, will hold 25 percent 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 in the UK and the London market following the Brexit vote. ABP is delighted to be working alongside CITIC Group and Charoen Pokphand Group, two of Asia's biggest enterprises, to deliver the Royal Albert Docks project."

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

The project is one of many in the London market into which Chinese companies have invested.

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.

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

Asian Growth Properties purchased an office building in London for around 154 million and there's also the Wanda One hotel and residential project south of the Thames River, masterminded 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.

Speaking to China Daily, Sir Tom Troubridge, chairman of China Business Group at PricewaterhouseCoopers, says 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 develops over the next year or so. But my guess is that investors realize 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 says it isn't just the weak pound that is attracting investors: "There were big Chinese investments long before the pound fell 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?

"London and the UK ticked the boxes and the reality is that 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," Lister adds. "And many Chinese people come here because of the English language. The British education system is important to many of them, and that helps drive their decision about why they want to invest and come here."

For China Daily