Beijing: China Investment Corp, (CIC) a USD 410 billion Chinese sovereign wealth fund has evinced interest in buying an 800 million pound (USD 1.3 billion) London office complex, in what could become the latest in an increasing number of international property deals by Chinese buyers.
Besides CIC, other bidders for the 1.1 million sq ft building include Chiswick Park owned by the US private equity firm Blackstone and government-backed funds from South Korea and Malaysia, state run China Daily quoted British media reports today.
The continued appreciation of the Renminbi has also made international purchases more appealing to Chinese buyers.
Commenting on the report Grant Ji, a senior director in the investment department at the real estate service provider Savills Property Services (Beijing) Co Ltd, said
"London has seen a really brisk property market this year, as the financial crisis brought more buying opportunities?.
"Moreover, the investment return in London's commercial property market is more steady than that at home, as the leasing terms there are much longer and the rent more steady," he told the daily.
CIC, which has been a regular bidder for British property, made its first investment in the UK property market in 2009, when it became a shareholder in Songbird Estates, which owns Canary Wharf - a district in the city employing 90,000 people, mainly financial services. It is also home to the global headquarters of banks such as HSBC and Credit Suisse.
Zhang Ping, head of research at the international real estate service provider Cushman & Wakefield, said "We have noticed a growing enthusiasm among Chinese investors for buying overseas real estate, and the UK and the United States are their favourite target markets.
According to Cushman & Wakefield, Asian investors accounted for 45 percent of property transactions in the City of London this year.
Chinese companies are also eyeing other acquisitions.
Beijing Capital Land Ltd, for instance, signed an agreement to purchase a land parcel in France on which it plans to establish a Sino-French economic zone.
Wanda Group, the country's largest commercial property developer, has said t plans to invest USD 10 billion in the US over the next decade, particularly in hotels, retail and commercial property.
And China Vanke Co Ltd, China's largest property developer by market value, has just set up a team to promote its business in the US.
"Compared with international competitors, Chinese property investors are sometimes a bit slow in the decision-making process, and as a result have missed out on some good prospects," said Zhang at Cushman & Wakefield.
"In some cases they are still unfamiliar with the legal and investment environment in target countries, but generally I think they are still a bit conservative".