» Asia is first port of call for
new launches
Straits Times: Fri, May 25
LONDON - When the
developer of Embassy
Gardens, a new residential
block in south central London,
launched sales this month, it
started pitching first to buyers
10,000km away - in Kuala
Lumpur. The launch in
Malaysia was swiftly followed
by others in Hong Kong and
Singapore.
So far, South-east Asian
investors have snapped up
over £100 million (S$201
million) worth of units on
offer - or about 160 of the
development's 350 units, said
the project's property agent.
'It's been Asia first for a
while,' said Ms Jazmine Goh,
business development
manager at Henry Butcher
Malaysia. 'Now they (wealthy
Asians) can show that they,
too, can afford to own
property in London.'
It was the same with the
Berkeley Group's Bridgeman
House on Kensington High
Street, a 95-unit condominium.
It will have its international
launch today at Singapore's St
Regis Hotel, ahead of its
launch in Britain.
Since the global financial crisis
hit in 2008, developers of
London property - long an
international market - have
increasingly been looking East
for buyers. Way east.
Between 2007 and last year,
about 43 per cent of buyers of
new prime London property
costing £1 million and
above came from Asia,
according to property broker
Savills.
Estate agent Knight Frank's
Wealth Report 2012 ranks
investors from China, Hong
Kong and Singapore among
the top 10 groups who buy
prime second homes around
the world. Indians, Malaysians
and Indonesians are fast
catching up.
'For many wealthy Asians
whose portfolios are already
skewed heavily towards Asia,
London represents an
opportunity to diversify their
investment,' said Mr Liam
Bailey, head of residential
research at Knight Frank.
While many Asians buy for
investment, others who have
studied in Britain buy a future
home for their children who
may take the same path.
Government intervention to
reduce speculation in home
markets has also encouraged
more bullish investors from
the likes of Shanghai,
Singapore and Hong Kong to
look abroad.
Foreign buyers have kept the
London property market
buoyant even amid a
recession. Prime residential
real estate rose 12.1 per cent
last year in London, one of
only two European cities (the
other being Zurich) to notch
price increases, said Knight
Frank.
'London's prime housing
market is seemingly powered
by capital flight from the
whole globe,' said the
company.
One Malaysian banker bought
a three-bedroom flat in
Bayswater for £1 million
in 2009, when prices were
about 20 per cent off their
peak.
'Like many of my friends who
have bought property in
London, I studied in Britain
and I'm familiar with the
London neighbourhoods,' said
the banker, who asked not to
be named. 'It made sense to
invest there when I wanted to
diversify.'
The price of his flat, which is
rented out, has appreciated 50
per cent in the last three
years.
As in any property market,
location is key. Bayswater and
the neighbouring Queensway
in West London are popular
with Asians, not least because
that is where the hugely
popular Four Seasons roast
duck and Khan's briyani are to
be found. They are also close
to the shopping havens of
Westfield and Bond Street.
'It's in Zone 1, there are no
high-rises and it's near Hyde
Park,' added the banker.
London has strict planning
regulations to preserve its
architectural heritage, green
spaces and protected views of
places such as St Paul's
Cathedral and Westminster
Palace.
This means a dearth of new
high-rise developments in
established, Georgian-
terraced neighbourhoods like
Knightsbridge, Chelsea and
Kensington.
Hence, Asian buyers who
prefer more affordable real
estate with facilities such as a
gym, pool and concierge are
also flocking to projects
farther afield like Embassy
Gardens, which is close to the
Vauxhall underground train
stop in south central London.
The building has units ranging
from just under
£400,000 for a studio
flat to over £1 million
for a three-bedroom
apartment.
The trend is expanding the
definition of prime central
London, with big increases in
£1 million- plus
transactions at the fringes of
central London, Maida Vale in
the north-west and Fulham in
the south-west, said Savills
Research's director Lucian
Cook.
One Asian investor based in
Singapore has ventured
farther south to Richmond, an
upper- class area where you
are more likely to spot
celebrities like Jerry Hall in a
specialist cheese shop than an
Asian face on its high street.
This may soon change.
'We chose Richmond because I
wanted my daughter to live in
a real home in the suburbs
with a park behind and a river
running past,' said the
investor.
The three-bedroom house in a
gated compound on the edge
of Richmond Park has
appreciated 60 per cent since
she bought it in 2006 for under
£2 million.
With lending rates low in
many Asian countries, some
are refinancing their local
properties and buying in
London, said Ms Goh.
Even a rise in duty on British
residential properties costing
over £2 million in
March, from 5 per cent to 7
per cent, seems to have had
little impact on the prime
property market, Mr Bailey
noted.
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