More than half of all purchases of prime retail properties in central London so far this year - equating to deals worth over £350 million (HK$4.32 billion) - were made by Hong Kong investors, according to research by property consultant Savills. "[Transactions in Hong Kong] have been affected by the government-introduced cooling measures in the property market. Undoubtedly, cash-rich investors are looking for other ways to invest, so increased transaction volumes in the United Kingdom retail market are not a surprise," said Peter Yuen, deputy managing director at Savills Hong Kong. One of the major London deals done by Hong Kong buyers was the acquisition in March by The Peterson Group, a privately held real estate company that owns LKF Tower in Lan Kwai Fong, of a development site previously known as the Quadrangle on Oxford Street for £121 million. Circle Property Development, a property investment company that focuses on office investment, bought a shop at 171 New Bond Street for £31 million. The shop is leased to jeweller Harry Winston and offered an initial yield of 2.27 per cent. Kwai Hung Holdings, a property investment firm that formerly focused on acquiring old buildings in Hong Kong, bought a retail premises at 165-181 Kensington High Street in London for £30.5 million at an initial yield of 4.9 per cent. Veteran property investor Lai Wing-to, who has been an active player in Hong Kong's retail property market, said he had renewed his focus on London's retail market after the government announced it would double stamp duties levied on local property transactions and tightened lending conditions in the commercial property investment market. "The value of my commercial building on Oxford Street in London has doubled since I bought in 2010. Even though the prices of retail properties in London have gone up a lot, the properties still offer rental yields of 3 to 4 per cent, which is higher than yields on prime retail shops in Hong Kong," he said. "Also, the UK economy and political conditions are stable, and the tax system is simple. A foreigner doesn't need to pay extra tax for buying property." Lai bought three retail properties on Oxford Street for a total of £221.85 million in 2010 and is now weighing more London deals. Rasheed Hassan, director of cross-border investment at Savills, said London properties offered good rental returns as well as the prospect of capital gains. "This is not just trophy hunting but a strategic move by these investors, most of whom have detailed understanding of retailing patterns," he added. Data from Savills shows that West End retail investments could achieve yields of under 4 per cent, and in some cases as low as 2.5 per cent for the best shops on Bond Street, and Hassan believes there will be continued demand for both retail and office properties in London. "In addition to the appeal of yields for prime office assets of around 3.5 to 4 per cent in the West End of London and 4.5 to 5 per cent in the city, investors are also attracted by landlord-friendly leases, upward-only rent reviews, and the minimal management that is required," he said. Sales of commercial property in Hong Kong dropped sharply after the government introduced cooling measures and banks tightened mortgage lending at the end of February. Ricacorp Properties says that 773 retail, office, and industrial properties were sold in August, up 28 per cent on July, thanks to the release of shopping malls and small shops for sale.