Chinese developers tipped to invest in luxury London market

More property developers from China are expected to enter London's luxury residential market over the next 12 months, lured by the city's bright growth potential.

Hong Kong developers might join the bandwagon, especially because the pound had already fallen 35 per cent against the Hong Kong dollar, said Mark Griffiths, managing director of luxury residential developer St George.

"They've got money and I don't think they'll pass up the opportunity to cash in on a growth market, especially London," he said. "I'm sure they'll make their money work."

Dalian Wanda Group's development project in London was likely to spark a spate of new developments in the city by Chinese developers, he said.

In June, the conglomerate said it was buying privately held British yacht-maker Sunseeker for £320 million (HK$3.8 billion) and would invest £700 million to build a 160-room luxury hotel and apartment complex overlooking London's River Thames.

Griffiths said a 45.3 per cent shortfall in London's residential sector, strong rental demand, a liquid and transparent property market and a host of other factors made the city attractive to overseas developers and investors.

"Capital values in London are growing by an average of 4 per cent a year. This means that investors in our project, for instance, can make a very substantial gain of about 20 per cent by the time it is completed in 2017," he said.