Brexit worries could be damping sentiment in Europe, but in Asia, real-estate investors do not appear too concerned.
While Chinese purchasers of London property have put away their wallets as capital controls bite, buyers from Hong Kong, Singapore and South Korea are picking up the slack.
Victor Li (李澤鉅), who succeeded his billionaire father, Li Ka-shing (李嘉誠), as head of the CK Group of companies, purchased UBS Group AG’s headquarters in the City of London financial district for ￡1 billion (US$1.31 billion) earlier this month, while Singapore’s Ho Bee Land Ltd splashed ￡650 million on a 21-story office building called Ropemaker Place.
In March, a venture between South Korea’s Mirae Asset Daewoo Co and NH Investment & Securities Co bought Cannon Bridge House for ￡248 million, while the Mirae group — which owns Mirae Asset — last month acquired a ￡340 million building from Blackstone Group LP.
Korea Investment & Securities Co last week successfully bid for a 15-story office building for ￡200.5 million.
According to CBRE Research, London office buildings worth ￡7.23 billion have changed hands this year, with buyers from Asia accounting for 60 percent of the action, the most ever in a half-yearly time frame.
It is a marked shift from 2014 and 2015, when China was the biggest source of Asian buying in London. Now, conglomerates like Dalian Wanda Group Co (大連萬達) are in exit mode.
There has been only one big Mainland Chinese deal this year — Beijing’s purchase of an office complex on the edge of the City of London for its new embassy.
Taking the crown to a large extent are investors from Hong Kong, snapping up iconic buildings such as the “Cheesegrater” at 122 Leadenhall Street and the “Walkie Talkie,” which set a new record for a single UK office site.
Hong Kong developers cannot be blamed for looking further afield.
The territory is home to the world’s most expensive commercial real estate and vacancy rates are currently at 4 to 5 percent, below the long-term average of 6.5 percent, CBRE executive director James Beckham said.
London also appeals to investors in Singapore, who, like buyers from Hong Kong, are familiar with British common law and might have sent their children to school or university in the UK.
Meanwhile, South Koreans appear to be favoring the UK over the US, although New York remains a popular destination for their funds.
It also comes down to affordability — it is worth remembering that since the financial crisis, the Bank of England has raised rates only once, while the US Federal Reserve has hiked seven times.
London and New York also typically have longer leases: about 10 years on average, versus about five in Paris, Frankfurt and Tokyo, and as little as two in Beijing.
Occasionally, as CK Asset Holdings Ltd’s purchase of UBS’ headquarters showed, investors can get even more. The deal included a 17-year lease, with the possibility of raising rent every year to keep pace with inflation.
While London might be the worst-performing market in the UK for home prices, the office sector looks set to keep Asian landlords coming.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
DIGITAL COMMERCE: In 2016, only 2 percent of orders were delivered in Taiwan, but that has risen to 10 percent, Foodpanda Taiwan Co operations director Nick Yu said Online food delivery platforms have seen explosive growth in Taiwan this year, helped by business opportunities related to the COVID-19 pandemic, company executives said at a digital commerce conference in Taipei yesterday. When the threat of COVID-19 kept people from going out to eat, more people experimented with ordering food deliveries online, Foodpanda Taiwan Co Ltd (富胖達) operations director Nick Yu (余岳勳) said. Foodpanda started operations in Taiwan in 2012. “We experienced 5,000 percent growth in the past 24 months,” Yu said. “That’s more than the previous six years combined.” In 2016, only 2 percent of food orders were delivered in Taiwan, but that