Investors from Asia are buying whole blocks containing up to 10 properties in London to rent out or for family use and are increasingly looking at Outer London, says a development and investment company
Asian buyers in London are not only buying single properties, but whole blocks, says one leading development and investment company
Boutique London investment firm, Euroterra Capital, says Chinese buyers that usually invest in prime London property are also starting to target Greater London real estate investment.
Pantazis Therianos, Managing Director of Euroterra Capital, tells OPP Connect, “There is a trend appearing in property sales in London, with China replacing Greece as one of the ten largest groups of buyers in prime Central London. There has also been an increase in Asian buyers beginning to favour prime Outer London property investments, as the yields are becoming greater.”
It says investors are not just buying single properties. “The block was bought by a Hong Kong Buyer who spent approximately £2,000 per square foot for a conversion of six flats in W2, London.
“This isn’t an isolated incident. More and more clients are buying a whole block of between 6 and 10 properties, which have been converted to a high specification. They like the appeal of owning a whole block to rent out or use for their family.”
The gross yield for a property investment in prime Outer London totalled 3.67% in the year to February 2013, compared to 2.84% in prime Central London, says Euroterra Capital.
In particular, properties in St. John’s Wood currently have, on average, a gross yield of 3.54%, in comparison to properties in Marylebone with gross yields, on average, of 2.21%. Euroterra Capital achieves around £600-800per week for one bed flats and £850-£1,050 per week for two-bed properties, with apartments achieving around 2.5% yield on average.
Currently, 49%, of the Prime Central London properties are bought by Non-UK investors, with Asia the sixth largest group of UK buyers. Overall, Chinese nationals bought more sub-£1 million London homes in 2013 than over the previous five years combined, data shows.
Euroterra Capital recently hosted a series of exhibitions in Hong Kong, Singapore and mainland China, at which it sold out of its latest London developments, York Shell, at Marylebone Central and Hyde Park Apartments, Lancaster Gate, Bayswater.
Mr Therianos says, “We are delighted with our sales success in Hong Kong, Singapore and mainland China, we are seeing a great deal of interest from Asian investors who are looking for a secure, well located London property, or good investment opportunity.
“There is a genuine trend from Asian buyers who want more than one property in the same space and for the same price as one larger property. Currently, this is preferred to larger London developments, for the purpose of a better chance of a good gross yield, or simply to house an entire family in one secure, convenient London location.
“For example, one Asian investor purchased an entire block of apartments to provide a secure and convenient residence, in a prime London location, for their entire family,” he adds.
Source:Soource:Asia|OPP Connect
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