Wednesday 21 February 2018

China to spend €1.3bn on property across Europe

China Investment Corporation head Ding Xeudong
China Investment Corporation head Ding Xeudong

Dahlia Fahmy

China's sovereign wealth fund bought retail properties in France and Belgium valued at about €1.3bn from a fund managed by CBRE Global Investors.

China Investment Corporation acquired the properties with affiliates of AEW Europe, according to a statement. The deal includes two shopping centres near Antwerp, Belgium, as well as malls, a retail park and other stores across France, CBRE Global Investors said.

International investors are buying retail properties in continental Europe to take advantage of a nascent economic recovery. Offices, shops and logistics buildings valued at €87.3bn changed hands in the first quarter, 25pc more than a year earlier, according to data compiled by BNP Paribas Real Estate.

The properties sold by the CBRE fund have 2.4 million square feet of space rented to retailers including H&M and Zara, according to a separate statement from AEW Europe.

The returns on CIC's overseas investments fell for a second year in 2014 as a strong dollar and weak commodity prices eroded the value of its holdings, the Beijing-based company said in its annual report published July 3.

Meanwhile, Hong Kong Real estate developer Samuel Tak Lee offered to buy 9.3pc of Shaftesbury, the owner of more than 580 restaurants and stores in London's West End, as more retailers seek to expand in the UK capital.

The Lee family, whose offer is valued at almost £230m (€340m), will own as much as 13.2pc of the landlord if the tender offer is accepted in full, according to a statement. Lee had owned more than 5pc of the company in October last year, before reducing his stake to as low as 2.75pc in December.

Rents on Carnaby Street and in Seven Dials, two neighbourhoods where Shaftesbury has significant holdings, are expected to rise this year as more overseas retailers compete to open stores in London, broker JLL said in March. Shaftesbury may also benefit when Crossrail, the train linking central London to Heathrow airport, opens in 2018.

"Passenger flows are expected to increase significantly with Crossrail, which will increase the vibrancy of the Shaftesbury villages and drive rents and values," Panmure Gordon & Co. analyst Sue Munden wrote on July 1. She has a price target of 1,106 pence for the shares.

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