Hk billionaire fills funding gap in u.k.’s low-cost housing market

Billionaire Cheng Yu-tung and two fellow Hong Kong investors, faced with soaring real-estate prices at home, are helping the U.K. plug a gap in funding for low-income housing after gaining control of a London-based property manager.

Cheng’s Chow Tai Fook Enterprises Ltd., developer Sammy Lee and businessman Peter Fung last month paid 30 million pounds ($48 million) for 61 percent of Pinnacle Regeneration Group Ltd., manager of 22,000 homes in the U.K. Cuts in social housing are part of the British government’s plan to trim a record deficit with the biggest spending reductions since World War II.

“There is a big opportunity for investors directly coming to the fore because of the cutback in funding,” said James Coghill, a real-estate investment adviser at Savills Plc. (SVS) “Social housing providers are seeking other funds and need to become more commercial.”

A Change in U.K. law last year enabled investors to profit for the first time from social housing in Britain, where there’s a waiting list of 1.8 million households. With property prices at home skyrocketing, Hong Kong investors are putting money into U.K. real estate ranging from subsidized housing and office buildings to luxury properties and infrastructure.

Source: Bloomberg.com