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Analysis – Chinese developers resume UK commercial property exit

Written by Ian Withers and Mark Jones

London, March 5 (Reuters)Some big Chinese developers plan to unload more UK properties to raise cash, taking full advantage of a gradually thawing market and buyers betting on a recovery, estate agents say. .

Chinese developers have been short-sellers for three years, shedding 1.4 billion pounds ($1.8 billion) worth of British real estate, according to data compiled for Reuters by MSCI Real Assets.

This is in contrast to the £12.8bn invested in the UK by Chinese developers between 2014 and 2020.

The sale was largely driven by the collapse of China’s real estate sector since 2021, with a regulatory crackdown on debt-driven construction causing a liquidity crunch.

continue lack of funds country garden evergrandeleading to withdrawal from the market. Australia And New York.

Commercial real estate values ​​have also fallen globally due to higher borrowing costs and post-COVID-19 work-from-home trends, leading to a collapse in deal activity.

Chris Gore, a veteran London real estate adviser at Avison Young, said: “At this point I wouldn’t sell unless I really had to,” adding that commercial property prices in London have corrected by 15 to 20 per cent in recent years. emphasized. .

In the UK, net sales activity by Chinese developers peaked at £1.2bn in 2022, but fell to £80m in 2023, according to data from MSCI Real Assets.

But net sales in 2024 are set to be £110m, already higher than last year’s figure, as estate agents have recently reported a pick-up in buying appetite.

They told Reuters they have received inquiries not only locally but also from abroad, including from other parts of Asia and offices of wealthy families with deep pockets.

Britain is rebounded After a six-year hiatus, Europe will be the country of choice for real estate investment in Europe in 2024, according to a study by real estate fund trade association INREV.

Real estate agents say there is a need for cash among some Chinese developers and a feeling among some buyers that property prices may be resetting faster in the UK than in other countries. As it spreads, it could encourage more trade and attract particular attention to the country.

Rashid Hassan, head of international and cross-border investments at real estate agency Savills, said this was a “very interesting opportunity” for deep-pocketed buyers to come and make hay.

Property experts say the market is expected to calm down in 2024 if the Bank of England eases borrowing costs, which should boost sales in London.

INREV said commercial property values ​​have already increased significantly in the UK, which could be ahead of the curve and spark a recovery.

“It just so happens that you’re more likely to find a buyer in a more liquid market,” such as Britain, said Ben Chow, head of Asian real estate research at MSCI.

Data from CoStar reveals that over the past two years, Chinese developers have sold UK commercial properties to buyers as diverse as the UK, Canada, Malaysia and Japan.

Still, whether more deals close will depend on Chinese developers accepting significantly lower prices, with distressed assets likely to end up on the market through receivership and a lengthy sales process. Real estate agents said they would be connected.

In Canary Wharf, east London, the Chinese-owned tower at 5 Churchill Place went into receivership last year. The receivers were sold last month at a 60% discount, according to a person familiar with the deal.

Other Chinese developers looking to exit this year include the hard-hit Country Garden. liquidation petition last week.The struggling company has built its flagship housing development in east London. put up for sale.

Meanwhile, developer R&F last month entered into negotiations to sell the multi-tower One Nine Elms project on London’s riverfront to a Chinese rival, it said in a filing to the R&F stock exchange.

And a nearly empty Chinese-backed office development at East London’s Royal Albert Dock was sold last year to British developer and amateur jockey David Maxwell.

“The Chinese bought it with the idea that they would fill it with Chinese companies,” Gore said. “But that never happened.”

($1 = 0.7878 pounds)

Chinese companies turn from buyers to sellers of UK property https://reut.rs/3wKSDW8

(Reporting by Iain Withers and Marc Jones; Editing by Tommy Reggiori Wilkes and Alexander Smith)

((Iain.Withers@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Summarize this content to 100 words
Written by Ian Withers and Mark Jones
London, March 5 (Reuters) – Some big Chinese developers plan to unload more UK properties to raise cash, taking full advantage of a gradually thawing market and buyers betting on a recovery, estate agents say. .
Chinese developers have been short-sellers for three years, shedding 1.4 billion pounds ($1.8 billion) worth of British real estate, according to data compiled for Reuters by MSCI Real Assets.

This is in contrast to the £12.8bn invested in the UK by Chinese developers between 2014 and 2020.
The sale was largely driven by the collapse of China’s real estate sector since 2021, with a regulatory crackdown on debt-driven construction causing a liquidity crunch.
continue lack of funds country garden evergrandeleading to withdrawal from the market. Australia And New York.
Commercial real estate values ​​have also fallen globally due to higher borrowing costs and post-COVID-19 work-from-home trends, leading to a collapse in deal activity.
Chris Gore, a veteran London real estate adviser at Avison Young, said: “At this point I wouldn’t sell unless I really had to,” adding that commercial property prices in London have corrected by 15 to 20 per cent in recent years. emphasized. .

In the UK, net sales activity by Chinese developers peaked at £1.2bn in 2022, but fell to £80m in 2023, according to data from MSCI Real Assets.
But net sales in 2024 are set to be £110m, already higher than last year’s figure, as estate agents have recently reported a pick-up in buying appetite.
They told Reuters they have received inquiries not only locally but also from abroad, including from other parts of Asia and offices of wealthy families with deep pockets.
Britain is rebounded After a six-year hiatus, Europe will be the country of choice for real estate investment in Europe in 2024, according to a study by real estate fund trade association INREV.

Real estate agents say there is a need for cash among some Chinese developers and a feeling among some buyers that property prices may be resetting faster in the UK than in other countries. As it spreads, it could encourage more trade and attract particular attention to the country.

Rashid Hassan, head of international and cross-border investments at real estate agency Savills, said this was a “very interesting opportunity” for deep-pocketed buyers to come and make hay.
Property experts say the market is expected to calm down in 2024 if the Bank of England eases borrowing costs, which should boost sales in London.
INREV said commercial property values ​​have already increased significantly in the UK, which could be ahead of the curve and spark a recovery.
“It just so happens that you’re more likely to find a buyer in a more liquid market,” such as Britain, said Ben Chow, head of Asian real estate research at MSCI.
Data from CoStar reveals that over the past two years, Chinese developers have sold UK commercial properties to buyers as diverse as the UK, Canada, Malaysia and Japan.

Still, whether more deals close will depend on Chinese developers accepting significantly lower prices, with distressed assets likely to end up on the market through receivership and a lengthy sales process. Real estate agents said they would be connected.
In Canary Wharf, east London, the Chinese-owned tower at 5 Churchill Place went into receivership last year. The receivers were sold last month at a 60% discount, according to a person familiar with the deal.
Other Chinese developers looking to exit this year include the hard-hit Country Garden. liquidation petition last week.The struggling company has built its flagship housing development in east London. put up for sale.
Meanwhile, developer R&F last month entered into negotiations to sell the multi-tower One Nine Elms project on London’s riverfront to a Chinese rival, it said in a filing to the R&F stock exchange.
And a nearly empty Chinese-backed office development at East London’s Royal Albert Dock was sold last year to British developer and amateur jockey David Maxwell.

“The Chinese bought it with the idea that they would fill it with Chinese companies,” Gore said. “But that never happened.”
($1 = 0.7878 pounds)
Chinese companies turn from buyers to sellers of UK property https://reut.rs/3wKSDW8

(Reporting by Iain Withers and Marc Jones; Editing by Tommy Reggiori Wilkes and Alexander Smith)
((Iain.Withers@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/analysis-chinese-developers-resume-uk-commercial-property-retreat Analysis – Chinese developers resume UK commercial property exit

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