Chinese banks are on track to complete a major global expansion which may see them acquire as much as 2 million sq ft of commercial space in the City of London over the next 10 years, according to a report from Savills.
The report states that the Chinese financial institutions see the UK capital as one of the key urban centres for global finance and will set up in the City as part of their $1 trillion investment in the West over the next several years.
Four in 10 of the biggest banks in the world are now Chinese, and the sector has been experiencing tremendous growth since the global financial downturn of 2008. This investment will change the financial climate of London, but will also serve to consolidate it as a major global financial centre.
Chinese investors have invested heavily in Europe within the past year, with approximately one-third of funds finding their way into this part of the world. It’s hardly surprising that several Chinese firms are focusing on making the United Kingdom a base of operations.
According to the Heritage Foundation, there has been an increase of trade between the two countries in the last two years. British exports to China have doubled to £15.9 billion over the past five years.
Chinese banks have indicated their discontent over the rules introduced to regulate banks following the 2008 crisis. Chancellor George Osborne recently paid a visit to that country. In October, he announced plans to deregulate some areas, including allowing Chinese banks to open wholesale branches in the United Kingdom.
The Savills report says that Chinese banks have had a limited impact on the London commercial property market to date, but that will change over the next few years. It indicates that while Chinese banks currently have a track record of paying over the odds to secure the right property, they have specific tastes, and prefer new or refurbished offices in central locations.
Previous Post
London Office Conversions soar amid Residential Boom
