Hong Kong investors have long been key players in London’s commercial real estate market. In the late 2010’s, London attracted unprecedented levels of Hong Kong capital, drawn by its stability and long-term returns as well as a place many investors liked to spend time outside of Asia, for tourism purposes and for its strong education platform.
However, the landscape is changing. Today, Hong Kong investors are increasingly becoming net sellers of London real estate, influenced by geopolitical shifts and evolving financial conditions. This article explores the trajectory of Hong Kong investment in London—from the buying boom of 2017-2018 to the more recent pullback—and examines the forces driving this transformation.
2017 and 2018 were peak years for Hong Kong investors in London. In 2017 alone, they invested £5.9bn in London’s office market (37% of the market), more than the combined total of the previous three decades. This capital influx pushed Central London office investment volumes to record highs. The momentum continued into 2018, with Hong Kong investment reaching approximately £8.5bn over the two-year period.
This era was marked by the acquisition of major “trophy assets,” such as the Leadenhall Building (the “Cheesegrater”) by Hong Kong-listed CC Land for £1.15bn, and 20 Fenchurch Street (the “Walkie Talkie”) by LKK Health Products for £1.3bn. These high-profile deals highlighted Hong Kong’s appetite for iconic London real estate.
Beyond office towers, Hong Kong capital also flowed into the luxury retail market in London’s West End, acquiring prime retail assets on the prestigious Bond Street and Oxford Street. These assets were seen as long-term investments in some of the world’s most coveted locations.
In more recent years, Hong Kong’s investors approach has reversed. From being net buyers for much of the previous decade, they have now become net sellers of London real estate. In 2024 alone, Hong Kong owners put over £2bn worth of London commercial properties up for sale, signalling their intent to capitalise on previous gains and a requirement to raise capital, despite the previous thinking that they would be generational holders of their assets.
High-profile assets on the market include One Kingdom Street in Paddington, Vodafone’s London headquarters, acquired by CC Land in 2017 for £292m as well as Chinese Estate’s Zara at 61 Oxford Street and Stanbrook House on Bond Street. This series of high-value disposals represents one of the largest sell-off’s of Hong Kong-owned commercial properties in London in recent memory.
A key motivation behind the pullback is the realisation of gains from earlier acquisitions. Many Hong Kong investors who bought London assets in the 2015-2018 period have since exited with profits. For example, in 2022, CK Asset’s sale of the UBS headquarters at 5 Broadgate fetched £1.21bn, approximately £108m above its purchase price which when considered alongside the currency gain made a significant profit.
However, not all Hong Kong sellers are cashing out on a high. With the cooling of the London real estate market since 2022, some investors are facing declining asset values coupled with higher financing costs. As global interest rates have surged, highly leveraged investors are feeling the squeeze, and some are being forced to sell under financial pressures, which we have seen at Churchill Place in Canary Wharf. This trend could lead to similar sales later in 2025, with investors seeking to offload properties as banks puts pressure on the borrows due falls in asset value.
The shift from buying to selling is clearly reflected in the data. During the peak years of 2017-2018, Hong Kong investors were responsible for over one-third of all investment volume in Central London offices and retail, making them the largest foreign buyer group.
However, recent figures from MSCI show that in 2024, Hong Kong investors have been net sellers, with £1.1bn more in disposals than acquisitions. This marks a dramatic shift from the inflow of capital seen just a few years ago.
Significant changes in macro-economic and geopolitical environment have led to increased uncertainty. This has prompted some overseas investors, albeit not all from Hong Kong, to reassess their offshore holdings. It’s also become more difficult for investors to move large sums of capital abroad without facing greater scrutiny, dampening the appetite for new offshore investments in markets like London.
The commercial and residential real estate market has been challenging in Hong Kong, with many overseas corporations choosing to locate elsewhere across Asia Pacific, mainly Singapore and Tokyo. Off the back of the new excess supply in Hong Kong and muted demand, there has been a spike in vacancy rates, which are currently 17% for Grade A office stock or 15m sq ft.
In addition, the city’s retail sales also fell 7.3% during 2024, compared with 2023, largely due to less tourism. Although this is now picking up, we’re seeing that tourists are tightening their purse strings and choosing to spend on cultural and F&B experiences when visiting Hong Kong. Retailers have taken advantage of this and expanded their footprint in prime locations. As a result, vacancy is just 7.8% vacant at the end of Q1 this year, a strong take up from the 15% vacancy we saw in 2023-2024.
Monetary Policy: The global shift in monetary policy has also had an impact. During the buying spree, interest rates were historically low, making financing cheap and readily available. However, since 2022, central banks, including the U.S. Federal Reserve and the Bank of England, have sharply raised interest rates.
This has made borrowing more expensive, creating pressure for highly leveraged investors. Hong Kong investors now face higher debt service costs at a time when asset values are stagnating, forcing some to liquidate their holdings.
Brexit led to a sharp decline in the value of the British pound, making London real estate more attractive to Hong Kong investors. However, the pound has since stabilised, and currency movements are no longer as compelling a reason for Hong Kong investors to continue their investments in London.
The investment story of Hong Kong in London has evolved dramatically in less than a decade. From a surge of capital inflows to a shift toward disposals, the trajectory reflects broader global and domestic changes.
However, London, which is ranked as the number one location for investment in our 2025 Investor Intentions Survey, remains a premier global real estate market attracting capital from all over the globe.
Capital in values in London have now bottomed out and we are seeing an increased level of bidder activity and investment volumes as the occupational markets continue to outperform and interest rates reduce.
Alongside this, the fundamentals of the city, such as its transparent legal system, deep liquidity, one of the best education platforms globally, and status as a global financial hub, remain undisputed.
With this in mind, I’m confident that once Hong Kong Investors overcome their challenges, they will return to London, and it will remain their number one location for overseas investment.
Ed Bradley is head of Central London Investment Properties at CBRE
