The beauty of London as an investment location is well documented. It boasts low supply, high demand and strong capital growth in a legally transparent city that is a global leader in finance, education, culture and, increasingly, tech.
Though there are flies in the ointment – the UK’s decision to leave the EU, affordability concerns, new taxes – the city still beckons investors, with the best investments combining all those aforementioned factors with a single location. Enter Mumbai-based Lodha UK’s forthcoming Lincoln Square.
“This is their opportunity to branch out into London,” begins Lodha Group’s director of sales Charles Walsh, of the private Indian developer, that country’s largest, with market capitalisation of US$5.5 billion.
Lodha specialises in high-end, high quality projects such as the 110-storey World One, soon to be the tallest residential tower in the world.
Formerly a commercial site, Lincoln Square sits at the epicentre of UK jurisprudence, education and business, a spot where new land for residential development is scarce at best.
“We got very lucky. The site came to us off-market. It used to be a 1950s, ’60s office block that housed LSE students … the architects, PLP, wanted to build a scheme that was contemporary, but that fits into the [fabric] of the area because there’s so much history,” explains Walsh, adding that Lodha’s excitement for the project stems from its location.
“It’s very hard to develop residential in that area because the council laws are incredibly tight. It’s also a very historic area: you’re five minutes’ walk from Temple Church, one of the oldest in the UK, and it mixes with the legal heart of London.”
History, law and some of the world’s finest schools are considerable selling points, but the UK’s immediate political future could wreak havoc with buyers.
The EU referendum result aside, a stamp duty amendment introduced in April adds 3% to all purchases, and has compelled some buyers to exercise caution.
Nonetheless, “I think the price point where that extra 3% will have a real impact is in the £2 to £7 million mark. Certainly some of these apartments will fall into that category,” Walsh admits.
“That said, to my mind it simply ensures potential buyers take a longer term, more robust view of the development and the investment they’re entering into. London has that long-term stability and it’s just putting off speculators. Which I think is a good thing.”
Walsh expects a strong mix of owner-occupiers and long-term investors at Lincoln Square’s primary market – lawyers looking for a weekday pied-à-terre and parents buying homes for future international students. Other investors will purchase knowing they’re likely to see 3% to 3.5% rental yields, as well as a “phenomenal tenant base” that’s not going away.
Pros and Pros
Potential for oversupply in key areas and at key price points (White City, Nine Elms, City Road, Canary Wharf, Earl’s Court) can make investment a sticky, competitive issue. Ideally located in the city’s historic legal district between Covent Gardens and the financial district, residential stock around Lincoln Square is even lower than in the rest of London.
Surrounded on all sides by major institutions such as the London School of Economics and King’s College London, the residence is also striking distance from Soho, Mayfair, Regent’s Park, St Paul’s Cathedral and Fleet Street.
Lincoln Square sits in the ultra-connected pocket of the city centre, atop tube stations at Holborn, Chancery Lane, Covent Garden and Temple, and future Crossrail 1 and 2 connections.
“The location of two major education establishments next door to the site provides a big pull for the Asian buyer. And obviously within that area is the Royal Courts of Justice, and Lincoln’s Inn Fields, traditionally where all the barristers and QCs work and have chambers,” Walsh says.
“The Royal College of Surgeons is next door, which brings major surgeons from around the world for conferences. So there’s a fun, eclectic mix of students, professors and professionals.”
Lincoln Square’s studio to four-bedroom residences are designed by PLP Architecture – Patricia Urquiola (amenities), Bowler James Brindley (interiors) and Gustafson Porter (landscaping) – to create what Walsh describes as a marriage between tradition and modernity.
“It will be contemporary with a bit of old-school charm about it as well. We have to appeal to the established professions in the neighbourhood, but also make sure it’s contemporary and exciting enough to appeal to the wider market,” he says.
“I think the beauty of having something the aggregate mass of this size allows us to put in the amenities and services – and luxury – that people in this area want and desire.”
Among Lincoln Square’s features are a courtyard, lounge, library, cinema, function room accommodating up to 36, games rooms, spa, swimming pool, gym and 24-hour concierge and security.
“We want it to be super special. We’re aware the clientele living and renting here work long hours and they want to come home to a relaxing five-star environment that feels like home and not a hotel. There are so many developments in and around London that charge a premium for being new-build, but don’t actually deliver the services you’re paying for. On this we’ve really gone to town,” Walsh says.
Speaking in May of the impending referendum, Walsh argued: “There will always be an excuse for uncommitted buyers to sit on their hands.
“The reality of what happens if we do or do not leave the EU … is people still need roofs over their heads, parents will always send their kids to these world-class universities. Their power will not be diminished. There is still an inherent housing undersupply in London and so I don’t think in the long term it will make a difference.”
Add to that Lincoln Square’s legal location – something not really influenced by the UK’s membership in the EU – and Walsh remains confident. Ultimately, in the wake of the June 23 referendum victory for the Leave campaign, only time will tell what Brexit will mean.
Lincoln Square is under construction and set for completion in 2018. Prices begin at about £900,000.