Hong Kong property investors cash in on Brexit
An 11 per cent fall in the British pound after the stunning Brexit result has aroused further Chinese interest in buying London investment properties.
However those relying on rental income have expressed concern over a tottering UK economy in the wake of the vote.
Three London projects opened for sale in Hong Kong yesterday, the day after Britain voted to leave the European Union.
The pound plunged by 11 per cent on Friday to its lowest level in 30 years, hitting HK$10.26.
Knight Frank, the agency of two London projects named Keybridge and City Wharf developed by Mount Anvil and FABRICA, said it had received five reservations for the two projects from mainland and Hong Kong investors.
Centaline Property project director, Terence Law, said it also recorded ideal sales for the Aykon London One project developed by DAMAC International.
Most buyers had high net wealth and were either eyeing long-term appreciation or self-use purposes, rather than for rental income, Law said.
“I just feel it is a right time to buy in,” a Hong Kong visitor to Aykon’s exhibition said, who wanted to remain anonymous. “The pound may continue to drop a little, but I will still buy as long as the project itself is good.”
Mr Ge, an immigration service provider from Shanghai, said his client was interested in buying property for immigration after the depreciation of the sterling.
“London’s position as a financial centre is unlikely to be changed even after Brexit ... the volatility is just temporary,” Ge said.
Aykon London One, a 50-floor building with 360 units, is offering 19 flats for sale in Hong Kong, with prices starting from approximately £800,000 (HK$8.5 million).
Hong Kong buyers can save over HK$80,000 on the 10 per cent downpayment thanks to the weaker pound.
Local landlords seeking rental income, however, preferred to “wait and see”.
“I think the pound was underestimated. A depreciation of 6 per cent is reasonable after the Brexit, rather than 10 per cent,” a Hong Kong landlord said. “The impact of Brexit is so uncertain.”
London’s population mobility was very high, and a potential drop in economic growth or employment rate would be a heavy blow, the landlord said.
Jon Hall, London-based sales and marketing director at Mount Anvil, said: “The news takes time to settle. But London is still a leading international market even after leaving the EU.”