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Asians Buying Up Central London Property
Posted in Real Estate
on June 13, 2010
by Kevin Brass
Asian investors are purchasing central London property in unprecedented numbers and now account for 20 percent of all new build sales, a new report concludes.
In the last year, buyers from Asia represented 49 percent of the purchased as investments, compared to only 36 percent from the U.K., according to the new international report from property company Knight Frank.
“While the market has returned to life, after it pretty much shut-down in 2008, current international investment demand is almost totally concentrated on London and is primarily coming from Asia,” said Knight Frank residential research director Liam Bailey.
Of the 7,595 new build properties completed in the 12 months ending in March, 41 percent were bought by investors, Knight Frank estimates. (That compares to 72 percent sold to investors in 2007, by the way.)
Of the investor buyers last year, 49 percent were Asian, with Chinese and Hong Kong investors represented the largest group, 11 percent, followed by 10 percent from Singapore. Despite tales of free-spending sheiks and Russian oligarchs, only 3.5 percent of the buyers last year were from the Middle East; 3.1 percent were from Russia.
The volume of Asian sales totaled more than £761million, Knight Frank estimates.
Favorable exchange rates, rising rents and a quest for secure markets may be driving the trend, Knight Frank says. Asian investors may be looking to diversify their portfolios, redistributing profits from recent price increases in the region.
The interest from Asia helps account for the recent surge in London prices.
“The purchasing power of an Asian buyer is far greater than UK buyers--the UK resident is suddenly 30 percent poorer against an Asian resident,” Bailey said. “We anticipate inward investment continuing as the Sterling exchange rate is still likely to provide a key driver for international purchasers into 2011.”
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