New wave of Asian buyers to rival Arabs in London luxury property market

The high-end property market in London is likely to see a “dramatic” increase in buyers from Asia over the next decade, potentially rivaling more traditional investors from the Middle East, according to a luxury developer.
“Our bread-and-butter clients have been from London and the Middle East in the recent years ... however I think there is going to be a huge emergence of clients from Asia,” said Niccolo Barattieri di San Pietro, CEO of property developer Northacre. The developer is a wholly-owned subsidiary of the Abu Dhabi Financial Group (ADFG).
“You have seen them in the low-end, but I think people are underestimating the purchasing power that they are going to have in the next five to 10 years. I am a big believer that a lot of the high-end residential market in London will be sold to the Asia market in the coming years,” he said.
Northacre is redeveloping New Scotland Yard, the former headquarters of London’s Metropolitan Police, into luxury apartments and a high-end retail area. The project — known as The Broadway — is due to be completed by the fourth quarter of 2021.
The developer has started to sell off-plan its proposed 268 apartments spread across six towers — ranging from one-beds to penthouse suites — to investors. One-bedroom apartments have a starting price of about £1.56 million (£2.1 million).
The development has a 25-meter pool, gym and a cinema room for residents.
Given the potential of the Asian market, Barattieri di San Pietro said that Northacre has just conducted its first roadshow in the region, traveling to Singapore, Shanghai, Beijing and Hong Kong. This was “first of all to get the Northacre brand out,” Barattieri di San Pietro said during a preview tour of an apartment from the Broadway development, “and second to do some exhibitions there that went really well.”
Securing new sources of demand will be important for property developers in London, where concerns about the impact of Brexit on the UK capital, as well as recent increases to stamp duty, have curtailed investor appetite for luxury homes.
“This is not like it was in 2012, 2013 and 2014. Mid-2014 was when the market peaked,” Barattieri di San Pietro said.
“The bull market had been so prolonged for the simple reason that London always had a scarcity value. There weren’t many towers going up.”
“London is still at the forefront of minds — people still want to buy here — but obviously the urgency we had before to buy is not there at the moment.”
However, he remains optimistic about the capital’s enduring appeal. “Ultimately London will continue to be London. We’ve got some headwinds (but) the core people that want to come here and buy a house here — especially in the high-end are still there — there may be less of them,” he said.
Northacre is hoping to win over buyers with the views of London’s iconic landmarks that will be seen from the apartments.
“The top apartments have 360-degree views. One has 37 windows,” he said. “From the living room you are looking at Big Ben, the London Eye and the Abbey, and from the other side in the bedroom you’ve got Buckingham Palace.”
The development of The Broadway has attracted some controversy since ADFG acquired the New Scotland Yard site in 2014, with many criticizing the decision to build high-end luxury apartments in a city facing a dearth of affordable housing.
As part of its agreement with the local authorities, Northacre is providing 10 affordable homes within its complex and has made a £10 million payment to Westminster Council for affordable housing elsewhere.
It ran into trouble in September when its application to build an additional 27 apartments on top of the already-approved 268 within the same complex was rejected by the Mayor of London Sadiq Khan, who said the development did not include enough affordable homes.
The company is considering whether to appeal against the decision to block the additional apartments being constructed. Barattieri di San Pietro said that it was not just up to the private sector to address the housing shortage, the UK government also needed to take responsibility.
“The government needs to to be cognizant of what part of the building cycle we are in compared to when they put policies in place.
“In the next five years, the private sector will be delivering less affordable units because they won’t be able to afford it as there will be less buyers,” he said.
“My question to government is: How are you going to do your part and deliver your part of affordable housing?”

Source:Arabnews