Chinese cash finds a home in London
New buyers replace Russian oligarchs in city’s ultra-luxury property market
As UK authorities cracked down on Russian oligarchs’ assets and influence, the picture for estate agents who long furnished them with luxurious London pads may at first have seemed bleak.
But those clutching their pearls for the capital’s realtors can rest easy, for they have been saved by a new favourite clientele: the Chinese investor. Property hunters from Hong Kong and China’s mainland have been filling the void as more caution is applied to Russian money, swooping on prime central London.
“Russian money is pretty much yesterday,” says Beauchamp Estates’ Paul Finch.
The number of new Russian buyers has tumbled over the past four or five years, with scrutiny having increased gradually after the Skripal poisonings, then much more after the invasion of Ukraine.
“The Chinese have definitely taken up the slack. They have been quite prolific, especially the Hong Kong Chinese, in buying up properties in London,” he adds.
“They want trophies. And with that you get all the bells and whistles — the amenities and the facilities.”
In 2021, all of the city’s top five super-prime property deals — £20 million ($38.5m) or more — involved Chinese billionaires, according to research by Beauchamp.
That was ahead of Russians, Americans, Britons and Africans, who made up the rest of the list.
Deals in recent years have concerned some of the capital’s most prestigious properties.
In 2020, Cheung Chung-kiu, a Hong Kong property magnate who also owns London’s “Cheesegrater” skyscraper, snapped up 2-8a Rutland Gate, a Knightsbridge mansion overlooking Hyde Park.
It cost more than £200m — making it the most expensive property ever sold in the UK.
With 45 bedrooms, the 1830s building was previously owned by Sultan bin Abdul-aziz, the former Crown Prince of Saudi Arabia.
Cheung has since been granted planning permission for extensive demolition and renovation works that will rework the eight-floor palace into a vast new home potentially worth £500m.
Elsewhere, Wang Jianlin, the founder of real estate, finance and movie theatre giant Dalian Wanda Group — whose fortune is estimated at £10 billion — forked out £80m for a Grade Ii-listed home in Kensington Palace Gardens.
It has been called London’s most
desirable street, just down the road from Roman Abramovich, the Russian oligarch.
Meanwhile, an unnamed Hong Kong tycoon splashed out £65m on a penthouse apartment in Belgravia just days after Boris Johnson’s 2019 election victory.
Trevor Abrahmsohn, an agent who specialises in properties on The Bishops Ave in Hampstead — London’s “billionaires’ row” — says most high-end Chinese buyers like “off the shelf” properties that do not need much work.
They also tend to be less securityconscious than their Russian counterparts and come with huge entourages who do much of the work for them, making the process far longer. “With many Eastern European buyers, they see it, they like it, they buy it. But the Chinese cogitate, they discuss — it is a process.”
One property that has several Chinese buyers aflutter is a Mayfair pile in Grafton St nicknamed the “Gucci mansion”, which previously served as the headquarters of the luxury Italian fashion brand. On the market for £55m, the eight-bedroom, seven-floor home — which has a sauna, steam room, indoor swimming pool, gym, cinema and four security vaults — is where Gucci designer Tom
Ford entertained the likes of Vogue
editor Anna Wintour.
Before that, while owned by Lord Brougham, the property’s high-ceiling state rooms played host to Queen Victoria and the Duke of Wellington.
So far it has attracted interest from several Chinese house hunters, according to Beauchamp, which is acting for the seller.
Finch says his company deals with buyers of every nationality but the Chinese now generate up to a quarter of super-prime deals.
Frostier relations between London and Beijing seem to have had little impact, he says, but in the past year deals have been artificially suppressed by China’s “zero Covid” lockdown policies, meaning many would-be buyers “can’t get here”.
Finch is bullish about the market’s prospects, pointing to the sheer number of billionaires being churned out each year by China.
While the US retained the largest number of billionaires, at 735, China was second with 607, according to Forbes.
Chinese are the biggest users of the UK’S “golden visa” scheme, which allows investors to pay £2m for at least three years of residency and later a path to citizenship.
Applicants from China have received 33 per cent of the so-called “tier one” visas issued since the scheme was launched in 2008, ahead of the 19 per cent issued to Russians.
According to Transparency International, 1624 visas have been issued to Chinese applicants and a further 2623 to their dependents.
Yet as Russian buyers recede with sanctions and anti-corruption investigators on their tail, there are questions over whether Chinese money may also come back to bite.
With so much dirty cash thought to have washed through London, the capital has already earned the unenviable nickname “Londongrad” for its seeming ability to look the other way.
Campaigners say the political realities in China should give estate agents pause for thought.
MI5 and the FBI recently warned that due to the Communist Party’s pervasive influence, it was sometimes impossible to distinguish between state and private sectors.
Rachel Davies Teka, advocacy director at Transparency International, says: “While investment from Russia has received significant attention, this should not distract from the money-laundering risk posed by funds from countries where corruption is commonplace, like China.”
— Telegraph Group Ltd
Russian money is pretty much yesterday . . .
The Chinese have definitely
taken up the slack . . . They want trophies.
And with that you get all the
bells and whistles — the amenities and
the facilities. Paul Finch, Beauchamp Estates