By Ed Attwood
UK's Chesterton Humberts hails strong interest in luxury offplan South Bank tower.
Potential property buyers in the UAE see more traditional markets like London as a healthy proposition, given the travails the local offplan sector has suffered, a UK-based estate agent has said.
Representatives from Chesterton Humberts are visiting Abu Dhabi and Dubai this week to market a planned 53-storey block – the tallest residential tower in London – to local investors.
“We’ve got a huge amount of interest from locals here, I think partially because the pound is so low right now,” Chesterton Humberts associate Chris Jones told Arabian Business on Wednesday.
“But also some of it is that they do see it [the London market] as a safer bet, I guess, because it’s a well established market as a whole.”
Jones said that UAE buyers had tended to be a little more circumspect than investors in Asia - where a recent roadshow was described “like an auction” - partly due to the recent real estate experience in Dubai.
“Here in the UAE, people are a little bit more savvy with regard to offplan, because they’ve seen the worst-case scenario,” he explained.
“But then again, a lot of people here, especially wealthy UAE nationals, are used to London – it’s one of their stop-offs during the great summer exodus.
Jones also revealed that there had been a different approach from potential buyers in Dubai, who tended to be more investment oriented, and those from Abu Dhabi.
“Those in Dubai seem to focus on areas like on tax implications and potential rental return, whereas I had one buyer from Abu Dhabi who was happy to pay an extra $1.4 million just to have a view of Big Ben,” he commented. The Tower, One St George Wharf – which is on the south bank of the River Thames in Vauxhall – will have 223 one, two and three-bedroom apartments with exceptional views into central London.
Jones indicated that the developer had not needed to take out external funding for the project, which is scheduled for handover at around the end of 2013.
“Given the off-plan experience in Dubai, they might approach this development with some trepidation, but in this case the developer is cash-rich. Investment-wise, a lot of people feel a lot more comfortable with that.”
UK has always retained its status as property safe haven for international investors.Jones Lang LaSalle in their research on 82 property markets worldwide in 2008,identified UK amongst the only 9 top notch markets on a stringent criteria of transparency and regulations. However,London is overhyped and has slipped from its position as the numero uno global city in Knight Frank's 2009 rankings.Independent research based on UK Land Registry's completed transactions data from 2000 to 2009 has proven beyond doubt that London is overshadowed by Manchester on capital appreciation and value-for-money scale. London is fully discovered and bloated on house affordability ratio,depending on international investors to keep its prices floating whilst Manchester with a more succlent, house affordability ratio of 4.6 times,can feed on the locally generated demand to maintain its upward price curve. Also,the UK offplan sector has taken the biggest brunt of house price fall in 2008-09 when completed new builds tumbled a huge 60% from the 2007 prices.Considering the cultural aversion(90% of local populace would prefer to live in houses rather than being clustered in a showbox flat) and value for money parameter,older built houses did weather the storm remarkably by dipping just 10 to 15% from the 2007 prices,before staging a smart recovery of 10% plus by mid 2009. Cash rich Gulf investors can simply weild the power of cash to can a quick sale,knocking 10 to 15% off the price on table in lower end houses...or 'Cinderella' of the UK property market.All they need is Â£50,000 to Â£60,000 in cash,and with Â£ remaining ever low,this is a steal if the rental yield stacks up to a healthy 8 to 9% NET per annum! The crippling supply issue in the UK housing sector (projected by UK govt. to worsen at 1 million houses shortage by 2020) shall ensure a definite rise,whatever the individual's investment window is.Look no further....the smartest investment on planet Earth and completely bullet proof!