Saturday, February 6, 2016

Suite dreams: rich Chinese investors become kings of their own castles

Suite dreams: rich Chinese investors become kings of their own castles

Tuesday, 06 October, 2015
Up to 19 castles have been sold to mainlanders this year, with many other Chinese buyers snapping up luxury rooms and suites in properties that have been transformed into elegant hotels
An Englishman’s home is his castle, so the saying goes, but some of China’s richest people are taking it literally and using their wealth to buy up the historic old buildings as property investments.
So far this year, Barrasford and Bird Worldwide, a British-based luxury property broker, has sold castles to 19 Chinese buyers.
Liu Gengxiong, chairman of a Guangzhou-based international trading company that specialises in luxury goods is among the mainland businessmen now planning to spend millions of yuan on buying his own castle.
“Chinese people like travelling to European countries such as France, so I will use my castle as a private club for my clients,” said Liu, who said he was interested in buying a chateau in France or an island in the South Pacific to receive his VIP guests.
Liu, who is also a luxury goods collector, said he had already invested in villas and other residential properties in Europe, but was more interested in buying more unique properties to cater to rich mainlanders who wanted to stay somewhere a little different when travelling overseas on holiday.
Robin Barrasford, managing director of the British broker, said: “We didn’t approach the [Chinese buyers] – they reached out to us. I hadn’t even thought the Chinese would want a castle in France or Scotland, which is amazing as no one from China bought [castles] last year.”
Suites and rooms of castle properties currently on offer include those in the imposing Highland Tay Retreat, built in Scotland in 1733, which was visited by Britain’s Queen Victoria and her husband, Prince Albert in 1842.
The castle, situated near the town of Aberfeldy, close to the Scottish Highlands, lies in 130 hectares and is now a luxury golf and spa resort.
Barrasford said rich Chinese businessmen that appreciated the architecture of old buildings were also buying luxury hotel suites in larger castles that had been transformed into luxurious hotels as investment opportunities.
He said rooms and suites were more popular with buyers because the total investment was not so huge.
Some property agencies also provide management services to investors to rent out their rooms to tourists.
Owners of suites could use them as their own holiday home or rent it out for use as hotel accommodation when they were not there, he said.
The cost of buying a single hotel room within a castle hotel started at about £350,000 and the investment could offer an annual return of 8 per cent, Barrasford said.
“While the stock market [in China] is not booming, we have seen some people investing money in Europe,” he said.
Alex Chehansky, a consultant at Lauren Berger Collection, a New York-based agency offering luxury accommodation and holiday rentals services, said there was increasing interest from Chinese investors in buying castles and other high-end properties in European countries such as Britain, France, Switzerland and Italy.
“They [Chinese investors] want uniqueness,” he said. “A castle is a large property with a lot of history and many people are interested in ‘investments so they can enjoy it,” he said.
An investment in a castle provided not only capital gains but also operating returns from rental, Chehansky said, adding that the resale value of castles was good because they were unique properties.
The devaluation in renminbi, the low-interest rate environment and the mainland stock market’s decline were all factors that were encouraging Chinese investors to turn to property investment in Europe, he said.
They were buying up not only castles, but also ski resort properties and other high-end real estate, he said.
“Luxury properties can always hold their value better amid a downturn in the stock market,” Chehansky said.