Weekly Property Round Up

Written on 25 August 2015

Strength of the pound pushing Asian Investors out of London

Battersea was a buzz word in property investment in the last year, as investors from Malaysia and Singapore snapped up the apartments as soon as available. The times however are changing, especially in the home markets of investors.

According to Knight Frank, purchases of prime London homes by Russians has fallen 2.9% of the total in the first six months of 2015, compared to 6.7% in the previous period. Chinese investors dropped to 9.4% from 10.9%.

The Nine Elms area, where developers are planning to sell 18,000 new homes over the next decade, has seen a rise in investors selling their deposit on not-yet-built properties, spreading concern that the properties had been purchased as a currency "play" by Asian investors, with prices set to fall as they attempt to cash in.

Economists have predicted a fall in the price of prime central London property of 10-15%, as concerns over a long-awaited dose of real estate reality is set to hit the capital, or in the words of Isaac Newton, what goes up must come down.

Blackstone to sell Devonshire Square

The US equity giant Blackstone is looking to sell its interest in the 630,000sq ft mixed-use scheme following current trends of interest from overseas investors seeking trophy assets. CBRE and Eastdil Secured are handling the sale of the estate, which is expected to make more than 60% profit, having been purchased in 2012 for £330m and is currently expected to sell for £550m.

This follows further news that One America Square will also go to market this year, with a tidy profit attached to it. Purchased for £85m in 2013, GM Real Estate and Knight Frank have been appointed to sell it at an asking price of around £150m.

Luxury Buyers looking further afield

Traditionally luxury residential buyers have focused on postcodes around Knightsbridge, Mayfair, Chelsea and Kensington, but Knight Frank research shows that the areas with £10m pus residential sales in London in the year to June 2015 was wider than three years prior, now including areas such as Southbank and Midtown.

This report also found that super-prime buyers were getting younger, with the number in their 30s more than doubling in the past year. This has been suggested to be due to buyers from tech sectors, and wealthy families entrusting their funds to lower generations.

The percentage of UK buyers above the £10m mark continued to grow as economic recovery gathered pace, confirming that London has retained its appeal as a safe-haven property market.