(MENAFN- Khaleej Times) A 30 per cent increase is highly possible in five years starting from 2015 or could be more on amazing developments in that area
The drop in oil prices is boosting the interest of Middle Eastern investors into London properties and house prices are expected to increase by 30 per cent in the next five years according to a top official of CBRE.
“From our point of view the market is very robust” CBRE senior director for Central London Rory Cramer told Khaleej Times during his recent visit to Dubai. Cramer was in town along with the CIT Development team which was promoting the South Bank Tower project in Gulf countries.
“We have seen very strong investment from Middle East since August last year. I think there are a lot of reasons and one of the key reasons is the drop in oil prices. High net-worth individuals also want to diversify their investments” Cramer said.
“I think the South Bank area outperformed the wider market. So a 30 per cent increase is highly possible in five years starting from 2015 or could be more on amazing developments in that area” the CBRE official explained.
The South Bank is likely to see a rise in demand for residential property as more and more technology and finance companies move to new commercial spaces in the area. This increasing commercial migration is being described as “the expansion of the City” and is set to have an increasingly positive impact on the local residential market.
“We consider South Bank Tower in Central London” Cramer said adding that prime London properties recorded 12-14 per cent growth in 2014 compared to 2013. In 2014 house prices in London rose by 2.6 per cent on average and the market under £2 million saw the strongest performance.
UK election
“There tends to be a natural slowdown in the weeks and months preceding any general election but we’re not seeing any substantial shift in investor sentiment” Paul Preston director head of Europe Middle East and Africa at IP Global told this scribe.
“IP Global carefully selects its investment opportunities and we educate investors to focus on long-term stable growth markets that won’t be impacted by short-term political cycles. As a result our UAE clients are not pulling back or jumping in response to the upcoming general election” Preston explained.
The main party policies won’t change the fundamentals: the UK has a strong supply-demand imbalance he said adding that measures to increase house building are not likely to meet demand in the near future and demand continues to rise.
“We don’t believe the outcome will have an impact on the five-to-20-year investment cycle-approach we encourage our investors to take — the UK remains a stable secure economy with great growth potential” he said.
The UK remains a hot market for investors. The main parties have all announced measures that will drive up demand won’t substantially tackle undersupply and will push for balanced economic growth and regional development and investment in major infrastructure schemes which will create new pockets of value.
London developer looks at ME
CIT Development is looking at Middle Eastern property investors for its South Bank Tower project which is located in Central London.
The 41-storey mixed-use development is a joint venture between Riyadh-based Jadwa Investment and CIT an independent private equity real estate firm. Jadwa is the major investor in the project which is valued £700 million.
“We are targeting owners occupiers. So people who would like to invest in London but also use the apartment as a bases as well for holiday homes” CIT Real Estate Partners associate director Christopher Richmond told Khaleej Times during an interview in Dubai.
Richmond along with other team members was in the emirate as part of select Gulf countries tour to market the company’s projects in Central London especially South Bank Tower. “We started the tour from Kuwait and after Bahrain this [Dubai] is our last stop” he informed.
He mentioned that the response has been good but said: “We don’t expect buyers like Chinese who bring money to the meeting room. We do expect a lot of interest from Middle Eastern buyers as they are familiar with London.” CIT believes that Middle Eastern interest throughout this year is going to improve according to him.
The company has sold more than 70 per cent of the units in the project and less than 30 per cent is available he said adding that penthouses starting from over £14 million are available in the project and Middle Eastern investors take interest in big apartments. South Bank Tower has one of the best views as well he added.
Providing the details of available penthouses he said a duplex penthouse worth £20 million is designed by Dara Huang a lateral penthouse (£20 million) is designed by 1508 and another duplex penthouse designed by Johnson Naylor is also worth £20 million.
“There are circa 15 per cent end-users from the Gulf region” he said responding to a question about the number of properties bought by Gulf investors in the project.
“The interesting news is that we are now into the final stage of build and will start handing over units from September this year” he said.
“End of September we are planning to hand over floors 11-19 end of October floors 20-29 and in February next year the rest of the floors” he explained.
As the British general election date approaches next month a slowdown in property sales and enquiries happen during the election time but CIT said: “Sales are progressing at a rate that CIT has projected therefore no slowdowns have been noticed relating to the elections.”
Property consultancy CBRE in its latest report said: “There is enormous demand for residential property along the South Bank. Buyers are looking to purchase for a number of reasons and they are coming from a wide variety of countries and from all manner of professions. As a result the South Bank is thriving.”
The South Bank Tower has been designed by Kohn Pedersen Fox Associates one of the world’s leading architecture firms responsible for several world-renowned building including The Pinnacle and The Heron Tower in London and the Shanghai World Financial Centre. Interior designers Johnson Naylor have also been brought on board to design quality residences that reflect the vision of the scheme.
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