Concrete AnalysisHong Kong investors optimise portfolio with London commercial property investments

Portfolio diversification is seen aided by the Hong Kong dollar strength and an end to Brexit stalemate, as shown by Link Reit’s first foray in London

The West-End and City markets are usually favoured by Hong Kong investors as there is limited supply to cater for a diverse appetite

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Red London buses pass by a mixed residential and commercial building in the Westminster borough of London that could attract deep-pocketed Hong Kong investors. Photo: Bloomberg

Published: 12:05pm, 28 Jul 2020Updated: 7:58pm, 28 Jul 2020

The key to optimising an investment portfolio is risk diversification. The idea is not something new but investors have recently become more aware of its importance due to the Covid-19 pandemic.

Property investors are now reviewing their portfolios to ensure diversified sources of income by sector and by geography. London’s commercial assets present a good opportunity for Hong Kong investors and developers to diversify their investment income with attractive returns and lots of potential upside to boot.

Their love for London’s commercial assets has not waned as a result of Covid-19. The recent purchase of 25 Cabot Square - home to Morgan Stanley’s business - by Link Reit for £380 million are just an example underscoring the trend. Hong Kong funds remain a strong engine fuelling investment activities in the UK capital.

Hong Kong clients like to invest in assets located in core areas of London, which are either close to its prime streets or tube stations in the so-called Zone 1 area. This is especially true for first-time buyers, as they prefer core assets.

The West-End and City markets are usually favoured by Hong Kong investors, as there is a very limited new supply to cater for a diverse investment appetite.