Chinese Private Equity Firm Is Investing $1.5 Billion in London


February 16, 2015

Chinese investors have been going after global property deals in recent months and yet another deal was struck during the weekend. According to reports, a Chinese private equity firm is investing around $1.5 billion in London real estate, with the aim of creating a new financial district in UK’s capital city.


The Project
The China Minsheng Investment company announced that it is backing a $1.5 billion scheme to create a new financial hub in the east London. The private equity firm currently has an $8 billion investment fund under its management. The Asian Business Port is being planned in the eastern part of London, with the aim of creating a business centre for Asian companies. According to Forbes, Minsheng’s investment will make it the largest stakeholder in the project.


The project will see the redevelopment of around 35 acres around the Royal Albert Docks. It is estimated the project will be completed in 2023. The first phase of the project is already underway and the premises are expected to open for Asian businesses in 2017. There will also be a small amount of housing available for sale. Further down the line, the development project will also build more spaces for commercial activities like retail shops and restaurants.


Minsheng’s president Li Huaizhen was quoted in Reuters saying, “After the project is completed, it will be the international platform and foundation for Chinese companies and capital to enter the European market”.


Lure of London
Chinese investors have been eager to invest in the lucrative property markets of London. Individual as well as corporate investors have been searching for opportunities in the London real estate market, with the East End providing a great option for new property development projects. Chinese private equity investors haven’t previously been as open for deal making abroad, but the recent months have seen a clear rise in investment. Chinese private equity is looking for deals abroad as the economic growth at home is slowing down.


China’s outbound investment surged by 14.1% in 2014. The total outbound investment stood at $102.9 billion last year, which is a record-breaking amount.


Rising to the Top
On top of the above, China Minsheng Investment is a relatively new player in the field of private equity, as it was formed less than a year ago. It has still managed to rise on top among Chinese private equity firms, highlighting how the industry is still developing in China. In the past few years, the Chinese authorities have been removing regulatory obstacles that have previously prevented the PE firms from investing overseas.


CNBC reported on Sunday, the private equity fund’s international advisory committee held a meeting just last month to deal with its global investment strategy. The fund has previously announced it is looking to invest the money on areas such as real estate and sustainable energy. Forbes analysts speculated the private equity firm’s long-term plan is to sell the developed properties further. Whatever the objective will be, Chinese private equity is getting more involved in overseas market, creating ever more competition for deals.

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