Bank of China leads Far East investment

Chinese investors have provided £50 million to develop a new hotel in London’s West End.

The InterContinental London Westminster Hotel is due to open in 2011 following the Bank of China investment and builds on its £100 million acquisition of One Lothbury near the Bank of England last November in what is seen as a fresh influx of investment in the capital from the Far East.

Bank of China faced stiff competition from home-grown institutions Lloyds and Barclays to provide financing for the new 254-room hotel which is expected to epitomise the kind of investment return that London property is internationally renowned for when it is completed next year.

The six-storey hotel near New Scotland Yard is expected to be worth in excess of £100 million.

It is the latest high-profile, high visibility investment from Chinese investors following the China Investment Corporation’s decision to acquire a 20% stake in Songbird, the AIM-listed company which owns a majority stake in Canary Wharf.

The predictions mirror the sentiment of PricewaterhouseCoopers’ Summer 2010 Debt Market Update which forecasts a large number of borrowers “looking East” for investment.

The underlying strength of UK property following the recession has been exemplified by the arrival of Norges Bank Investment Management, which manages the £280 billion Norwegian Government Pension Fund Global, having recently established a new real estate arm with a view to expanding its equity portfolio.

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