CHINESE investors’ appetite for London property is expected to increase this year after the Chinese government relaxed rules on offshore investment.
Savills said the recent relaxation on the investment of insurance proceeds by the Chinese Insurance Regulatory Commission could result in up to £10bn of new inward investment into London.
Research published by the property specialist yesterday showed overseas buyers will continue to dominate the market this year after accounting for 76 per cent of investment transactions in the City during 2012 and 67 per cent in the West End. That compares with around 60 per cent reported in 2011 for both markets.
Total transaction volume for the City market was £8.9bn, with Asian buyers – including buyers from Malaysia, Japan, Greater China and Korea – investing £2.27bn.
Major deals include the acquisition of Thames Court on the banks of the Thames by Korean Pension fund POBA for £165m.
Malaysian fund Tabung Haji bought SJ Berwin’s City offices at 10 Queen Street Place for £165m in September last year.
Meanwhile the West End saw £6.1bn of investment deals last year, with European buyers snapping up £1.55bn of properties.
These include German property fund Deka Immobilien which bought Guardian Media Group’s headquarters at King’s Cross for £235m and 1 Southampton Row for £110m in April last year.
Savills said overseas investors, who typically favour central London, conducted 79 deals in the City compared with 64 in the West End.
Domestic purchasers transacted a higher level of deals at 88 in the City and 89 in the West End, but with a lower overall sales volume.