Chinese investors have marched into the UK's property space in the past few months after uncertainties resulting from Britain's vote to leave the European Union in June pushed sterling to a low exchange rate.
Although so far no official sales statistics post-referendum are available, estate agents across the country are raving about Chinese interests and deals from anecdotal evidence, which is supported by a few huge deals.
In London, China Minsheng Investment Corp bought the French bank Societe Generale's London headquarters office for 84.5 million pounds ($112.3 million) in September.
Outside the capital, Sichuan Guodong Construction Co announced in July it would invest more than 1 billion pounds in Sheffield for property development, and Country Garden announced up to 2 billion pounds ($2.65 billion) of investment in Birmingham in September.
Many of these deals were already in negotiation before the referendum vote in June, but uncertainties before the vote meant Chinese investors had held these deals in the pipeline. A big depreciation of the pound after the vote gave Chinese private and corporate investors quick opportunities for action.
The pound was down against all major world currencies on June 24, and at the end of the London trading day was down by nearly 9 percent against the dollar, marking one of the biggest one-day declines on record.
"The significant decline of the pound more than compensate for the short term risks associated with Brexit negotiations,” said Rasheed Hassan, head of cross-border investment at Savills, a UK estate agent.
Over 80 percent of deals transacted through Savills since the vote have been for overseas investors, and Chinese investors represent a sizable portion.
Eric Zhao, Chinese Capital Markets Specialist at Savills, added that Chinese investors are well known for taking a "long term view” in the property market.
This surge in demand from Chinese coincided with reduced competition for properties from domestic and other international buyers, who are more likely to be holding back their investments as they are more concerned about the UK economy's current uncertainty and may have more difficulty obtaining funding for their purchases.
For example, a few days after the vote, on June 30 Singapore's United Overseas Bank suspended loan applications for London residential properties, fearing the UK's long term economic growth. By comparison, Chinese individual investors have an advantage, as they are more likely to be cash buyers.
"Chinese buyers are brave and perceptive, they are willing to take risks and will be rewarded,” said Naomi Heaton, chief executive of Central London Portfolio, an asset management firm specializing in prime locations in London's property market, who compares the current UK economic uncertainties to those after the 2008 economic crisis.
"Back then, many people were scared and wanted to wait and see, but the brave investors took first mover advantage when property prices fell and benefited greatly from it,” she said, explaining that external uncertainties create good buying opportunities for central London's limited supply of residential units, which have strong fundamentals.
London Central Apartment 3, the latest fund that Heaton's team closed in July, carried 10 percent investment from Chinese interests, which is a big increase from previous funds. The fund almost reached its target of 100 million pounds, and Heaton said the fund received five times as many enquiries in the four week period following the vote compared the same period before.
Heaton's comments are backed by statistics from Juwai, a real-estate website based in Shanghai that allows Chinese buyers to browse residential and commercial properties around the world.
Juwai said the number of Chinese enquiries about the British residential and commercial property market has been 30-40 percent higher than average in each week from June 20 to July 11.
Such growth is set against the wider picture of a surge in Chinese purchases in the UK's property market in recent years, partly due to the lack of good investment opportunities as China's domestic property market starts to show signs of a bubble, and investors' confidence in the Chinese stock market waned after a stock market crisis last year.
Against this background Chinese investors started to look for more stable investments, and the UK's property market became a naturally attractive choice due to its political stability, economic resilience, security of property title for the investor, and relatively transparent market.
