Are you ready for Chinese Investors?

This article appears in the February edition of our Creating Wealth Through Property Newsletter.

Stories suggesting a decline of Chinese investment into the UK are highly misleading. Yes, Brexit and the tightening of Chinese currency controls have had an impact, but the fundamentals can’t be denied. According to China Daily, Chinese direct investment into the UK more than doubled in one year – from $9.2 billion in 2016 to $20.8 billion in 2017. Denise Li, chief executive of PGC Capital, a Chinese private equity fund that plans to invest £600m in UK property over five years, is quoted as saying “You in the UK see Brexit as huge but back home in China, we see this as a ‘first-world problem’.”

According to the Financial Times, property remains the most favoured sector for Chinese acquisitions in the UK, accounting for 44% of the value of deals announced between 2012 and the first half of 2016.

This reflects what we see at LCN: steady interest from Chinese private investors and their representatives in property projects. The question is: what is the opportunity for you personally? And what are you going to do about it?

Imagine that you were in a room full of Chinese investors, all there to hear about your projects. What would you say? How would you say it? What written information would you give them? Chinese people are famously impatient – when they want something to happen, they want it immediately. You should see my wife Xiaofang when she asks me to fix a wobbly toilet roll holder in Chateau Sutton. Chinese people may be ‘thin faced’ on a lot of things (see the book review on page 3), but they are ‘thick faced’ in demanding clear responses when it comes to business matters. If you don’t have the answers they need – including a crystal clear explanation of what terms you are proposing – you’re just a boring interlude between breakfast and lunch.

Even if you did survive that particular ‘dragon’s den’, are you confident that your marketing efforts don’t put you at risk of prosecution by the Financial Conduct Authority? The risks involved are no less real than those faced by intermediaries and investors who may unwittingly create collective investment schemes or alternative investment funds.

LCN has set its mission to be the millionaire-makers for the property world. That’s why we have created our marketing toolkit for property developers (see the back page for further details), to help you to prepare yourself to market to ultra-high net worth investors, and transform your business by accessing larger deals and higher returns.

Raising Development Finance from Private Investors

This report sets out 5 of the most popular structures used by developers to raise capital from private investors, distilled from our lawyers’ experience of working on investment structures for over 20 years.

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