• Wed
  • Oct 1, 2014
  • Updated: 6:59am

NEW horizons

PUBLISHED : Friday, 03 February, 2012, 12:00am
UPDATED : Friday, 03 February, 2012, 12:00am

With the continuing restructuring in the banking sector hurting sentiment, overall real estate prices in London are expected to see a correction of about 3 per cent this year.

However, market experts believe prime properties in central locations could rise in value as a result of financial and technological initiatives.

One of these is related to Hong Kong, as London and Beijing have agreed to allow yuan foreign exchange to take place in the British capital, opening the door to more business opportunities.

Moreover, the rapid expansion of the city's creative and high-technology businesses clustered around 'Silicon Roundabout', an area encompassing Clerkenwell, Hoxton and Shoreditch, is turning London into a major technological hub in Europe. Spanish telecoms firm Telefonica Digital says it will set up its global headquarters in London in July, employing 400 people.

Liam Bailey, head of research at estate agency, Knight Frank, says this influx of overseas businesses will lift confidence in the housing sector, which was battered by job losses in 2011 and bonus cuts in the banking sector.

'Silicon Roundabout does more than give confidence - although not as big as the financial sector, it is becoming clear that London has the largest technology sector in Europe,' Bailey says.

Demand from international buyers remains strong. Estate agents report frenetic buying activity by foreigners in December and January, especially by Greeks and Italians wanting to invest money outside of the troubled euro zone. Wealthy Russians and Arabs, concerned about political uncertainty in their own countries, are buying homes in London, because they consider it a 'safe haven', Bailey says.

This inflow of overseas money will help lift prices for prime central London homes by 5 per cent this year, Bailey forecasts.

Examples of properties on the market include NEO Bankside, a new scheme of 217 apartments built by Native Land next to the Tate Modern art gallery on the south side of the River Thames. The apartments are housed in four 'pavilions' designed by Rogers Stirk Harbour + Partners. The property is marketed through Knight Frank, and prices start at GBP3.5 million (HK$42.66 million) for two-bedroom apartments in Pavilion B.

In Chelsea, the Athos Group and Carlyle Group are building Henry Moore Court, a set of 15 apartments and two townhouses on Manresa Road. The project is marketed through Aylesford International, and prices start at GBP5.5 million for the homes due for completion this autumn.

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