HK, mainland investors snap up London project
British developer Native Land has sold more than GBP22 million (HK$282.6 million) worth of flats in its joint-venture luxury residential project in central London to Asian buyers - the majority being from Hong Kong and the mainland.
'Asia represents an important and growing market for us,' said Alasdair Nicholls, the chief executive of Native Land.
Underscoring that observation, he said, was the fact that about 65 per cent of buyers in the first batch sale of NEO Bankside flats marketed last month were from Hong Kong.
'Among all the units being sold in Asia, 10 of them were sold to Hong Kong buyers as well as two to our first buyers from mainland China,' he said.
A 50-50 joint venture with Grosvenor group, NEO Bankside is next to the landmark Tate Modern, Britain's museum of international modern art.
The development comprises 197 units in four blocks of 12 to 24 storeys, built at a cost of GBP300 million.
The first phase of 89 units would be completed by the end of next year, and the remainder in 2012.
'We have also had a number of mainland buyers, one of whom paid a visit before making the purchase,' he said.
For Chinese buyers the most popular flats were two-bedroom units of 1,100 square feet priced between GBP1 million and GBP1.5 million each, he said.
Units overlooking the Thames and St Paul's Cathedral are priced from GBP1,000 to GBP1,500 per square foot.
Some mainland buyers were prompted to make their purchases to provide accommodation for their children when they studied in Britain, said Nicholls, and others were driven by the investment opportunity offered by the strength of the Hong Kong currency against the pound.
The pound has lost 22 per cent of its value against the Hong Kong dollar since October 2007, meaning buyers investing in British property can get more for their money.
Nicholls said prices of London flats began to stabilise in May after falling by as much as 15 per cent over the previous 12 to 18 months.
Driven by limited supply of quality residential projects in central London, he believed investments made now would have an upside potential.
The current environment was similar to that of the 1990s, he said, when Hong Kong buyers took advantage of lower property prices in London and a weaker pound to buy property and made a handsome profit after a rebound in prices.
Property consultancy Knight Frank forecasts that London house prices will increase by 26.8 per cent from now to 2014, returning prices to their 2007 peak levels.
Nicholls said rental yields on London properties were in the range of 4 to 6 per cent a year. A two-bedroom unit could rent for up to GBP1,275 per week, he said.
Big spenders
Percentage of Hong Kong buyers in transactions for NEO Bankside flats: 65%
