In Love With London
Property Report, South East Asia, August 2011If you think Asian interest in London properties is waning, think again.
By Andrew Batt
Asian buyer’s love affair with London property appears to be strengthening. Singaporeans and buyers from Hong Kong and the Chinese mainland have been dominating prime property purchases for many months, but now a new wave of Asians- buyers from Thailand and Indonesia- are becoming an increasingly important part of the London luxury market.
Hardly a weekend goes by without a property exhibition taking place in Singapore, Hong Kong and Kuala Lumpur showcasing opportunities in London. These events have grown in popularity and are starting to appear in cities like Bangkok and Jakarta, but while cynics might suggest this is down to markets in major cities being saturated, it appears nothing could be further from the truth.
Property Report South East Asia was present at one such event in Thai capital recently where Savills was selling a number of UK properties to Thai buyers at a London Property Showcase. Such has been the demand in recent months that the company has now employed a Thai-speaker in its London offices to take care of its clients.
James Talbot, Savills’ head of London new homes sales, underlined the growing importance of Thai buyers in the market. He said “The strength of the Thai baht compared to sterling, and the uncertainty surrounding the elections in Thailand defiantly brought more Thai buyers to the London market in recent weeks. Their focus is core prime central London new build, particularly in Kensington and Chelsea, and are predominately looking for larger apartments priced around £3 million (US$4.8 million) upwards. My estimate is that Thai buyers in our market.”
But Thai buyers aren’t the only ones competing at the top end of the market. Charlie Findlater, sales manager at Marler & Marler, said: “We’ve seen no let-up in the activity in buyers from South East Asia. We’ve just found a £4.3 million (US$6.88 million) investment property for an Indonesian family who flew to London for a week with the specific purpose of buying a property while they were here. They were after a central London location, good security, and strong capital growth. Within a week the deal was arranged on an apartment. This is fairly typical of the South East Asian buyer- they know what they want, and the main thing is a good return when they sell. If the rental income produces a return too, that’s a bonus.”
But it’s not only London that’s attracting a foreign interest. Alan Forsyth, Managing Director of buy-to-let specialist Property Secrets, said: “In the first two weeks of July alone we helped Hong-Kong based client invest more than £300,000 (US$480,000) in buy-to-let properties in various locations. The stability and prestige of the UK market remains highly desirable with international buyers. Three Chinese buyers have invested £80,000 (US$128,000) each in the alternative asset class of student accommodation in Manchester, and three cash buyers from South Africa invested £200,000 (US$320,000) each in buy-to-let properties in North Wales, the North west of England and Cornwall.”
And those much promoted London property exhibitions certainly look to around for a while yet. Nick Underhill, Chesterton Humberts’ head of International Residential Development, said: “Levels of interest in London property have remained strong for most of the year. Coming into July we would expect activity levels to decrease slightly due to traditional seasonal fluctuations, however in September activity will lift again and we already have a number of exhibitions booked in Hong-Kong, Malaysia and Singapore.”
One developer who has achieved success from these events is Thornsett Group. The company brought its new build development St David’s Apartments in Islington, North London, to Malaysia and Singapore for two weekends earlier this year. The development of 30 one and two bedroom apartments sold out. According to the sales team, one of the key questions asked by potential buyers was how many tube stops the development was from top London universities: UCL, Imperial and Kings College London.
Eric Lim, the CEO Malaysian sales agent Hartamas, believed the successful launch of St David’s Apartments in Kuala Lumpur showed the strong level of interest and confidence which Malaysian investors have for London property. And on the back of the interest, the developer was planning further project exhibitions last month including one project which was exclusively aimed at Malaysian buyers.
London property, and indeed U.K property as a whole, seems still to be incredibly attractive, and the number of projects targeting Asian buyers will only increase.