For many Southeast Asian real estate investors, the search for overseas property begins and ends in London. The capital is seen as a safe bet, especially for Malaysian and Singaporean buyers. Interest for homes in England’s capital has picked up and the market is experiencing a renaissance of sorts. Some experts are even calling this a London property revival.
“The London real estate market is currently enjoying a revival, with many new projects being offered to potential purchasers in Malaysia almost on a weekly basis. With this seemingly continuous supply, the potential purchaser is spoilt with choices,” Francis Chua, Head of International Properties at Rahim & Co International, noted. “However, as with all investments, there may be pitfalls. These range from overpriced units to poor quality finishes and irresponsible developers. We at Rahim & Co. vet developers carefully and only market property from selected reputable developers, thus ensuring our clients the best London has to offer.”
Rahim & Co is helping market London projects in Malaysia while its partner, One Global, is doing the same in Singapore. Both firms are members of Leading Real Estate Companies of the World®, an invitation-only network of global agencies. Property investors from both Malaysia and Singapore appreciate the openness of the London market as well as the ability to buy numerous property types.
“UK has always attracted astute investors from all over the world, and the UK property market is one of the most open property markets available. Unlike some countries, qualified property investors are not restricted to what they are allowed to invest in, be it residential or commercial properties,” Chua pointed out. “Furthermore, the residential properties that are available to investors residing in Malaysia are not restricted to apartments only. They may also buy landed properties.”
In terms of property types, Chua noted off-plan apartments are fueling the London property revival due to the initial outlay being relatively small and full payment, usually serviced by loans from local banks, not being due until the apartment has been completed. This can significantly benefit investors regardless of if they are in it short or long term.
“Astute investors are attracted by the chance of capital gains upon handover, which may be a few years later. Coupled with a well-planned loan scheme, this investment provide very good return,” Chua said. “If the purchaser then decides to retain the apartment after handover for rental returns, we can recommend very good property management companies which handle the tasks involved in the letting out of London properties for the owner.”
There is more to it than investment in the London residential real estate market for many Malaysian and Singaporean buyers. The city holds a special place in the hearts of many people while the educational opportunities are also very important.
“Emotional returns in the form of enriched lifestyle of having a prestigious address in London are immeasurable. Providing a secure base for their children who study in London brings peace of mind to the client,” Chua stated. “The possibility of capital gains on the property is an added bonus, whatever the reasons for the purchase.”
Westgate House in Ealing is one development popular with Rahim & Co’s investor clients. It is in a strategic location near the future Elizabeth Line that will benefit from the Crossrail line that will improve London’s public transit. There is strong potential for capital gains and high demand from tenants which all make the luxurious development an outstanding investment.
Stadia Three, an all-new development in Wimbledon, is another project being launched in Malaysia by Rahim & Co. Residents of Stadia Three are able to enjoy an active lifestyle as they benefit from the wonderful local amenities making it suitable for both investors and owner-occupiers. The project was well received during the launch in Malaysia proving once again London is in.
The good and bad of Brexit
Brexit has certainly affected some segments of the London real estate market, but the impact hasn’t been widespread. The negative effects were mostly evident in the high-end segment. Chua explained property prices fell by about 10 percent year-on-year in the Royal Borough of Kensington and Chelsea, one of London’s most upscale districts. It is a different story in suburban areas of the capital where the London property revival is in full swing.
“The price rises are found in the outer London boroughs. These properties attract the more discerning property buyer, and quite rightly so, due to the fact that they are more affordable and hence provide good value for the price paid,” Chua noted.
As tenuous negotiations continue between the UK and EU, many observers are wondering how a hard Brexit would impact the London property market. According to Chua, the resultant immigration control may result in a softer rental market, but long term, a Britain that is able to trade on its own terms may have a positive impact on the economy and result in renewed confidence in property prices.
“We believe that, independent of the possible effects of Brexit, which are speculative at best, if the property is chosen carefully, now would be a great time to invest in quality selections given the current pricing and the favourable exchange rate for most Southeast Asian currencies,” Chua concluded.
This story on the London property revival can be found in Dot Property Magazine’s Southeast Asia Wealth And Outbound Investment Report 2018. Click here to read it.