In 2013 London Mayor Boris Johnson launched the official Chinese language website for the city. The site received 82million hits in the first 24 hours (source: Financial Times). Since then, interest in the capital has not waned, and Chinese real estate investors have been investing huge amounts of money into London real estate.

In 2014 Chinese investors spent over £1.2billion in just three real estate purchases: 10 Upper Bank Street, Tower Place, and 111 Old Broad Street (source: UK Business Insider). The spending is showing no signs of letting up with a new development project in the Docklands gaining £1billion in backing from a single Chinese real estate investment group (source: The Telegraph).

Overseas property safer than Chinese stocks

The super-rich in China are turning their attention from stocks to property. The stock market at home is unpredictable. Major Chinese shareholders sold nearly double the amount of shares (valued at 360billion yuan) in the first half of 2015 than they did in the entire of 2014. Chinese shares have lost more than 20% of their value since the middle of June (source: The Guardian).

For wealthy Chinese investors looking for a safe investment for their money, real estate investment in the UK has a lot to offer, thanks to the market’s transparency and liquidity.

UK is Europe’s most transparent market

Last year the UK was found to have the most transparent commercial property market in the world. A transparent market is one where all the relevant data and information is publicly available. The move towards greater transparency has been driven by the attitudes of millennials, as well as the government’s desire to encourage future investment in the country.

For Chinese real estate investors, their home market is much slower in moving towards transparency goals. Tier 1 cities were ranked at 35 on the global table, classed as ‘Semi-Transparent’ (source: JLL).

Liquidity is important for a real estate investor

As well as being highly transparent, the UK property market was also the most liquid market in 2014. The liquidity of a market refers to how easily investors can enter and exit the market – the importance of this is obvious for Chinese real estate buyers with a lot of money to spend, on the lookout for a good return. In 2014 11.3% of the UK’s property stock was transacted, putting it ahead of Sweden (9.4), Finland (7.7), and Germany (4.2). The UK was also Europe’s most liquid property market in 2013 (source: CoStar).

Chinese high-worth individuals looking to live in UK cities

A recent survey of China’s rich (those with more than $1.6million in assets) found that 64% planned to leave the country and live overseas, or were already in the process of emigrating. For these people, London holds many opportunities. Clean air, more space, access to prestigious educational establishments for their offspring, and lower prices are all factors that are enticing the rich away from their home country (source: Wall Street Journal).

(Image source: Image created by cooldesign | www.freedigitalphotos.net)