International investors spent £2.2 billion on central London new-build property in 2012
16 January 2013
Knight Frank’s new report, International Residential Investment in London, out today, reveals the size of overseas investment into the London new-build sector. It also examines how the financial crisis has changed the dynamics of the market, looking particularly at the rise in investment by Asian buyers. Finally, it analyses who is buying new-build property and why, before highlighting the potential future overseas markets for London property.
- Overseas buyers purchased central London new-build property with a value of £2.2 billion in 2012, up 22% from £1.8 billion in 2011
- A total of 52 nationalities bought new-build property in central London last year. The most active overseas buyers (ranked by number of transactions) of central London new homes are from Singapore (23%), Hong Kong (16%), China (5%), Malaysia (4%) and Russia (3%)
- UK buyers remain the largest nationality group, with a 27% market share
- 33% of international investors buying off-plan do so to provide children attending London universities with a base in the city
Knight Frank identifies three major factors that have underpinned the appetite for property in London: first, the capital growth potential and opportunity for investment diversification; secondly, the advantageous currency differential for many nationalities; and thirdly, London’s continuing leadership in top-flight education.
The educational opportunities in London are particularly attractive for buyers from Asia, and their preference for new-build property has had an important impact on London, allowing developers to secure funding and maintain healthier construction levels in central London than in the rest of the UK.
Knight Frank expects the core overseas markets to retain their appetite to buy in central London, and also expects domestic share of the market to rise from its current levels. It also forecasts increased investment activity from China, particularly if the restrictions on overseas capital transfer are eased. Turkey will continue to be a key buyer market: its economy has outperformed crisis-hit Western Europe and many of its citizens have existing business and family links with the UK. Indonesia is also a country to watch, Knight Frank says.
Neil Batty, head of International Project Marketing, Knight Frank, says, “Overseas investors will continue to play a vital role in the acquisition of prime central London new-build homes in 2013. They are attracted to London due to advantageous currency values, the opportunity to invest in a tangible asset with the prospect of long-term strong capital appreciation, and the recognition that London continues to offer world-leading educational and cultural facilities.”
Gráinne Gilmore, Head of UK residential research, says: “International interest in London property is not a new phenomenon, but the economic and financial changes since 2007 have created a fresh model for overseas investment in new-build property. Agents report that the appetite for London property remains strong, and there is an increasing interest in London property from a widening range of overseas buyers, especially some emerging economies where economic growth has remained robust during the downturn.”
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Knight Frank, on behalf of Northridge Capital, launches to the market 33 Blackfriars Lane in the City of London, EC4V 6EH. Offering 16 beautifully-refurbished two and three bedroom apartments arranged over 5 floors, 33 Blackfriars Lane is set in an ideal location within Blackfriars providing a range of transport links including access to Crossrail from 2018, making this a great investment.
Blackfriars is located a short distance from both the financial hub of London and the River Thames, surrounded by a range of iconic architecture both new and old, including St Paul’s Cathedral and Millennium Bridge. Blackfriars allows you to live in the centre of London where there is very little residential development.
Prices of 33 Blackfriars Lane start at £835,000. Apartments range from 639 sq ft to 1,527 sq ft in size. Anticipated completion on 31 October 2014. There is expected to be significant interest in buying from both those who know and love the area, and purchasers who are new to London.
Neil Batty of International Project Marketing at Knight Frank, says, “Refurbished developments within the City of London are extremely rare and therefore we expect 33 Blackfriars Lane to receive significant interest from all international markets.”