Real estate companies in London and other major European cities are bracing for a surge in their already hot property markets due to signs that wealthy Chinese are seeking a haven from the nation's stock market turmoil.

Chinese individuals and corporations have been amassing property overseas for several years, particularly in the United Kingdom.

Yet after last month's market crash, in which about 30 percent was knocked off the value of Chinese shares prior to government intervention, real estate industry insiders predict that Chinese investors will be looking to further diversify their portfolios by pumping money into European property.

"There is anecdotal evidence that Chinese buyers have intensified their interest in global property markets, including London, as a result of the recent stock market volatility," said Tom Bill, head of London residential research at Knight Frank LLP, a property consultancy founded in 1896.

Brian O'Connor, director of Adhoc Immobilien, a Berlin real estate agency in Germany, echoes this. "The whole (Chinese) market is precarious, so people would like to spread their risks and enter different markets," he said.

The value of investment in overseas property by Chinese individuals and companies rose from $600 million in 2009 to about $15 billion in 2014, according to estimates by Knight Frank. The company said Chinese buyers accounted for 11 percent of all transactions above 1 million pounds ($1.55 million) in London last year, up from 4 percent in 2012.

A separate report released in January by the United Kingdom property consultants Savills states that 70 percent of real estate purchases in London last year involved foreign buyers, with transactions totaling 14.6 billion pounds.

China ranked second only to the United States in terms of the nationality of buyers in the UK capital, with American investors putting 3.4 billion pounds into the market compared with Chinese investors' 2.2 billion pounds.

"London has always been a magnet for overseas investment, whether it was from the Middle East, the U.S. or from around Europe. Chinese investment is the newcomer," said Eric Pang, head of the China desk at Jones Lang LaSalle Inc, an investment management company specializing in real estate.

Offices, hotels, apartments and mixed developments have proven so far to be the most attractive assets for Chinese buyers. For example, Dalian Wanda Group, one of China's largest conglomerates, invested 700 million pounds in June 2013 to build a five-star hotel beside the River Thames, which runs through the city center.

Chinese state-owned developer Greenland Holding Group announced early last year it will invest 1.2 billion pounds in two overseas development projects in London. They include a residential building on the historic Ram Brewery site and a high-end residential project in Canary Wharf.

China's banks also like London. Last June, China Construction Bank paid 110 million pounds to acquire No 111 Old Broad St in the city's financial district, known locally as the City.

And it is not only a UK phenomenon. "Interest from Chinese investors in European property has been constantly rising for the past two, three years," said Sebastian Fischer, managing partner at estate agency Engel & Voelkers in Berlin. "Institutional buyers are mainly looking for large investment properties, while private individuals generally want apartments.

"European property has always been a well-functioning asset and is highly attractive from a Chinese portfolio management standpoint. Interest has risen due to the weaker euro and insecurities on Chinese stock markets."

Paloma Perez Bravo at E& V's office in Madrid added that there has also been an increase in Chinese investment in Spain.

"Three percent of overseas buyers were from China in 2013. The following year it was 3.4 percent. We don't have the statistics for this year yet, but we expect it to be about 4 percent. So Chinese buyers are increasing year-on-year," she said. "In Q2 this year, we had many Chinese buying houses in Madrid. In Q4 2014, it was a very good time, as a lot of Chinese people came to ask about properties."

As in London, Dalian Wanda showed its ambitions to go global last year by acquiring the Edificio Espana, a Madrid landmark that was Europe's tallest building when it was completed in 1953. The company paid Grupo Santander 260 million euros ($282 million) to secure the historic structure.

While the recent stock market turmoil could see more Chinese money flow into European property markets, industry insiders said the trend over the past few years has come about from a complex set of factors. Chief among them are China's enormous overcapacity and the sluggish domestic property market, which have prompted wealthy people to diversify with offshore assets.

Walter Boettcher, research director and economist at global realtors Colliers International, based in the UK, said: "When we (Europe) went into the financial downturn, there was a lot of uncertainty, so obviously the Chinese, like many other foreign investors, were looking for safe places to invest. There was a bit of a push factor, too.

"The Chinese (companies) realized they were very exposed to dollar-denominated economies, and in some measure they were looking at the UK, and even Europe, as a means of diversifying their exposure to various currencies."

Air pollution and health and social services issues have also led many Chinese individuals to buy property in the developed countries to which they may eventually emigrate.

"What's more, the Chinese Government is encouraging companies to go out and invest in overseas markets," added Rasheed Hassan, director of cross-border investment at Savills.

Insurance giant China Life is one of the biggest corporations to follow that advice, buying No 10 Upper Bank St-an iconic skyscraper in London's Canary Wharf-for 795 million pounds last year.

Simon Barrowcliff, executive director of central London capital markets at CBRE, a commercial real estate company, explained that, initially, the acquisitions were for occupational reasons, such as Chinese banks that had expanded into the UK buying their own headquarters in the City.

The influx of Chinese capital into London and other major European cities that is expected to follow the stock market crash in China will have a dramatic effect, some analysts said. They believe the investment will potentially attract even more money to the real estate industry and create tens of thousands of jobs.

(China Daily August 3, 2015)