Capital from China and Hong Kong has accounted for a third of all investment into London commercial real estate this year, up from less than 10 percent before the referendum, according to property group CBRE. The volume has risen to 3.9 billion pounds ($5.02 billion) in the first half of the year up from 1.1 billion pounds in the same period of 2016. Kate King reports.
Asian investors have been paying sky-high prices to secure some of London's most iconic real estate. The so called 'Cheese Grater' and 'Walkie Talkie' among those recently acquired - for almost three times their construction cost. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "Given the low value of the pound buying property here is cheap and it is not just the Chinese that are buying it but it is loads and loads of others.They also perceive that not very much has been built in prices perhaps will carry on going up, so its a reasonably sort of safe haven over here." Property group CBRE says Chinese and Hong Kong investment in London's commercial real estate has tripled this year. It's up from less than 10 percent before Britain decided to leave the EU. And rather than seeing Brexit as a deterrent investors have been using it to negotiate leases which run several years past the event. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "Chinese investors alsO iI think like the idea of you know of physical assets rather than simply paper assets and obviously the property markets around the world, I think you've benefited from a lot of a lot of Chinese interest. There's no real evidence at the moment that the property market is about to tip over the edge. Certainly the the office market remains fairly strong but of course that could change in the wake of the UK's exit from the EU. But risk IS starting to seep into the market in other ways Vacancy rates have been rising as businesses look offshore and most analysts expect rents to fall in the next three years. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "I think it's actually quite a good thing that we're still seeing a great interest in the property sector of commercial property sector because it will enable us to kind of underpin it for the sort of tough years that we've got coming ahead. " So the question may soon turn from who's buying and why, to how long and at what discount.