Chinese financial institutions are capable of taking over 2 million sq ft (186,000 m2) of office space in the City of London over the next decade, which equates to nearly half of the city’s annual average take-up, according to Savills.
Chinese financial institutions are capable of taking over 2 million sq ft (186,000 m2) of office space in the City of London over the next decade, which equates to nearly half of the city’s annual average take-up, according to Savills.
Savills says this could take the city back to similar levels of the boom times when the banking sector accounted for a significantly higher level of take-up than the 2% recorded in the past couple of years.
The report, written in conjunction with Savills' China operation, examines existing financial institutions in China and factors shaping the location preferences of these occupiers. It finds that property is considered one of the best investment options open to Chinese financial institutions with China Taiping, China Merchants Bank, Ping An, Taikang Life, Bank of China and Bank of Communications being amongst the biggest buyers of office units across Shanghai and Beijing in recent years.
In addition, Agricultural Bank of China and China Construction Bank were among the top buyers in Hong Kong where buying for occupation has become a means of investment. This investment case is further strengthened by the high rents in Beijing, Shanghai and Hong Kong and short lease lengths.
Stephen Down, head of Central London investment at Savills: 'China’s financial sector grew from 472% of GDP in 2008 to 612% in 2011, and this number is expected to reach almost 800% in 2016. Chinese investment into the West has been speculated to exceed $1 tln (€726 bn) by 2020. Boasting the largest institutions in the world, demand for requirements in the City of London are anticipated to be registered as these businesses become more integrated into the global economy.'