Business
19:33, 10-Aug-2017
Post-Brexit UK remains attractive to Chinese investors
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Brexit uncertainty does not seem to be putting off Chinese buyers.
China’s largest property developer, Dalian Wanda, has coughed up almost 600 million US dollars for a 10-acre plot at Nine Elms Square, one of London’s largest regeneration projects.
Wanda already owns the nearby One Nine Elms project where it plans to build a 58-story residential tower alongside a five-star luxury hotel.
The Nine Elms area on the south bank of the River Thames. /dailymail.co.uk
The Nine Elms area on the south bank of the River Thames. /dailymail.co.uk
It’s not just property that is attracting Chinese buyers. Earlier this year, Chinese investment group Fosun put up the majority of the funds in a 16.6-million-dollar deal with UK technology company The Floow. And in June, JD.com – the Chinese e-commerce giant – invested 397 million dollars in luxury online retailer, FarFetch.
“Perhaps in certain industries, like financial services, they are a bit more cautious in terms of the passporting right into Europe and how that might impact on their business operation model moving forward. But generally speaking, for other sectors we haven’t really seen a slowdown in terms of the level of interest,” said Suwei Jiang, head of China business for PricewaterhouseCoopers.
2016 was a record year for Chinese outbound mergers and acquisitions. More than 430 deals were made globally, totalling 216 billion US dollars, according to M&A advisory company DealGlobe.
Sheffield in northern England. China’s Sichuan Construction Group last July invested one billion British pounds into building projects in the city. /VCG Photo
Sheffield in northern England. China’s Sichuan Construction Group last July invested one billion British pounds into building projects in the city. /VCG Photo
Chinese takeover activity has slowed a bit this year though. DealGlobe said 183 deals have been done in the first half of 2017, worth just 62 billion US dollars.
Since the start of this year, China has been cracking down on outbound transactions as part of a coordinated effort to stem the hundreds of billions of cash pouring out of the country.
But experts believe the impact will be limited and that the number of Chinese M&As will continue to grow.
“The Chinese government has changed some regulations so that approvals are a little harder to get for certain sorts of deals. Strategic deals, deals of reasonable size being done by fully fledged companies that want to move into similar or related areas… those are generally acceptable. So we don't see it as a slump, we definitely see it as a slight slowing down but even now we’re beginning to feel like we’re through it,” said Andrew Bell, chairman of DealGlobe.
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