Lifestyle

High-yield Investment In Greater London

High-yield Investment In Greater LondonTrying to keep track of all the sales launches in town from London is like trying to count water drops during a rainstorm. Okay, slight exaggeration, but developers continue to look to Hong Kong investors for forward funding — and Hong Kong investors continue to snap up London properties. Strong London investments don’t necessarily have to equate with luxury prices. As inward migration continues, Central London redefining itsself; a quality build in a good location is the real key.

Eagle Eye
Many would scoff at the idea of an address outside S1 or SW1, but a prime spot in London’s emergent Old Street area, minutes from its burgeoning tech hub, could be a good idea. In the heart of EC1, Eagle House is surrounded by colleges, universities and a raft of landmarks and IBM, KPMG and Microsoft are moving into Tech City. “Investors in London are either looking for heritage buildings … or trendy buildings like this with full facilities. [They] want to live close to the city but not right in it, because it’s dead on weekends. Old Street is a mixture of everything. There are facilities and restaurants and Eagle Park nearby. Plenty of Asian investors are already planning for when their kids are in school there,” explains Amous Lee, Hong Kong agent IP Global’s executive director of international property investment.

TFP Farrells’ modern 27-storey tower for Mount Anvil features 206 studio to two-bedroom apartments. IP Global is heading the sales in Hong Kong for their four-time collaborator; the duo’s previous projects are currently averaging yields around 5 percent. Lee thinks Eagle House will be a nearly ideal mix of local end-users and investors. “I think it will about 60-40 investors because of the number of upcoming tenants and big offices. 23I also think a small portion will be students because it’s very close to Russell Square … and the rents are about 20 percent lower here.”

Eagle House is technically a mixed-use development dominated by residences. (Larger suites should be available in the next sales phase.) The lower floors comprise commercial and retail space, as well as a health club and courtyard. Prices range between HK$4.5 and $11 million (Late 2015).

Town of Kings
“Argent has always done big, complicated, exciting, multi-phased urban projects,” reasons Robert Evans, partner at Argent, one of the driving forces behind the massive regeneration of King’s Cross. He’s referring to Argent’s acclaimed Brindleyplace in Birmingham as a lead up to why Argent threw its hat into the King’s Cross rejuvenation ring. “When it came to King’s Cross [our] skills just seemed to be relevant. We looked at it and thought, ‘Wow, when else are you going to get a chance to do 67 acres in a capital city, with heritage and sense of place?’ It was a bit seedy and down at heel, but the fundamentals were always there … Big area, great transport in a world city. That’s a good start.”

To say the King’s Cross regeneration is ambitious is an understatement. When completed, the multi-billion pound project will include one of London’s largest public squares, 50 new buildings, 20 new streets, a college campus as well as retail, commercial and residential spaces, all serviced by King’s Cross and St Pancras International stations. Google has decided to build its million-square foot headquarters there, Waitrose will become the district’s first grocer, and the refurbished Great Northern Hotel reopened this year. That’s the short version.

Among the 2,000 total homes in the development are student housing, affordable housing and premium apartments at Art House, but most will be innovative projects like Tapestry at Canal Reach, design forward and calibrated to King’s Cross’ unique personality. “The King’s Cross apartments are pretty scarce,” states Evans. “They will sell to people who appreciate the area’s mix of old and new, and think the combination of transport links, water, and art and design is for them.” Prices at Tapestry begin at approximately HK$11 million, selling through Knight Frank in Hong Kong (2020).

Squared Away
King’s Cross isn’t the only regeneration game in town. Across the river Elephant & Castle is in the midst of its own rebirth, one of the last in Zone 1. Amid a cafe culture neighbourhood less than 20 minutes from London’s most important districts (Waterloo, Piccadilly Circus, Victoria) and schools, Lend Lease’s Trafalgar Place is a wholly affordable and sustainable septet of towers comprising 235 studio to three-bedroom homes, each with outdoor space from which to enjoy London’s newest park.

Trafalgar Place is just one of scores of south bank developments being created to slake the voracious appetite for London property. But Trafalgar is less about luxury or forced neighbourhoods and more about living. “There’s already a community there. We’re talking about the regeneration of a community, not the creation of one,” explains Ashley Osbourne, executive director for international properties Asia at Colliers International, Lend Lease’s sales partner in Hong Kong. “We’re expecting buyers who work in the city. This is a very affordable product 14 minutes from work.”

With Elephant & Castle on course in its £1.5 billion rejuvenation — including 3,000 homes and improved transport links — over 15 years, values are predicted to rise by as much as 30 percent. “I think we’re a long way off from £3,000 per square foot, but we’re forecasting growth to 2020,” says Osbourne. How long London will sustain its boom no one knows. “All we can do is look at the facts. The pure economics is that 40 percent of housing requirements are not met. The pound is weak. It’s an established market and it’s the world’s financial centre.” Good enough. Prices at Trafalgar Place begin at HK$3.7 million (Late 2015).