The New York Times has an interesting story about Chinese investment in London flats where wealthy Chinese are buying rental apartments either for their children to live in while studying in the UK or as rental properties, or both. The real point of our posting this is the fact that Chinese are buying assets abroad. The buyers range from the super-wealthy to the merely wealthy:
Buyers from mainland China are a tiny portion of purchasers of high-end real estate in London, accounting for 5 percent of all purchases by foreigners of London properties valued from £500,000 to £1 million this year. But they are a growing presence. They accounted for less than 1 percent of purchases in that price range last year, according to Savills, a real estate agency. Europeans still make up the largest portion, Savills says, although it does not break down buyers by country. Unlike clients from Russia and the Middle East, however, few Chinese buyers are looking for London apartments to live in themselves. A majority of them are seeking investments in a real estate market they perceive as more stable than their own and are planning to receive steady rental income for years [….]
Then there are the fabulously wealthy, like Joseph Lau, a Hong Kong real estate billionaire who recently spent £33 million on a six-floor mansion in Eaton Square in London, an address he shares with the Russian oligarch Roman A. Abramovich. Mr. Lau’s son, Lau Ming-wai, studied at the London School of Economics and then worked for Goldman Sachs in London. More typical, though, are Asian buyers spending £1 million or less. Because of China’s restrictions on overseas investments, most of the Chinese buyers pay cash to minimize the paper trail.
Chinese Investors Flock to London to Buy Real Estate (New York Times)