World Economy

Asian Buyers Rival Arabs in London Luxury Property Market

The Broadway project is due to be completed by the end of 2021.The Broadway project is due to be completed by the end of 2021.

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, Reuters reported.

“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 ($2.11 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.

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.”

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