Indians now No. 2 in London realty deals

LONDON: The prime central London property market has just gone through what experts classify as an exceptionally uncertain period with geopolitical earthquakes like Britain’s decision to leave the EU and Donald Trump’s election as the US president. But the effect those events had on the value of the pound sterling viz-a-viz other currencies has thrown up an interesting trend — the phenomenal rise of Indians in this high-profile realty market.

Research shared by property consultancy

Cluttons

’ partner and head of research Faisal Durrani shows that, between August 2016 and July 2017, Indian participation amounted to 22 per cent of all

real estate

transactions in prime central London (made up of the royal borough of Kensington & Chelsea, along with the borough of Westminster). “It has been noted recently that there has been an upturn in Indian buyers, making up about a fifth of all buyers at nearly 4 billion pounds out of a total 18 billion pounds,” said Durrani in a recent interaction with journalists.

This is also supported by real estate services firm Cushman & Wakefield’s partner (residential – London markets) Mike Bickerton. “In fact, Indian UK property investments accounted for only 5 per cent of sales in central London five years ago in 2012. By 2017, that figure had jumped to 22 per cent,” he said.

Cluttons’ Durrani said the last peak in this market was seen 10 years ago in Q3 (July-September) of 2007. “If somebody purchased then in rupees, today they would find that their property is worth 20 per cent more than what they paid for it 10 years ago (due to the Indian currency’s movement). So that means there’s a strong incentive to sell. Actually, if you look at what the Indian rupee was doing back in 2014-2015, had they sold and exited the market they would have made a 60 per cent profit. It looks like that may be opening up again, which is why we may have seen an upturn even in Indian buyers entering the market,” he said.

Dollar-denominated deals offer an incentive too for adding the London property portfolio. “For Indian buyers with holdings in US dollars, or any country’s buyer with dollar holdings, the advantage is that it is 30 per cent cheaper today than it was 10 years ago. So, there is a very strong incentive to purchase London residential today,” said Durrani.

He made it clear that this is purely a currency advantage. “It is not because values in London have fallen 30 per cent, because that hasn’t happened. It is purely on the basis of the sterling’s weakness and constant fluctuation in the

forex

market,” said Durrani.

Studies commissioned by

Taylor Wimpey Central London

, a part of the FTSE100-listed

Taylor Wimpey Plc

and a leading developer in this niche market, also have come up with similar research on the forex fluctuations aiding the realty market globally.

The developer’s sales & marketing director Darren McCormack said, “We’ve engaged quite a few forex companies to try and gauge this because, being one of the key reasons helping the market, we want to know when it’s going to taper off really. And a lot of them reckon that it’s going to take a good handful of years to get back to its previous strength. So, this advantage is going to stay for the overseas buyers for the foreseeable future, to say the least.”

As a result, Taylor Wimpey Central London is confident that it will successfully sell an entire range of residential products through various projects in and around central London that include the Onyx Apartments at King’s Cross, FiftySevenEast in Dalston, Palace View near Lambeth Bridge and the Westminster Quarter in Westminster which has proved to be particularly popular with Asians.

Another project on offer is the stylish

Music Box

in Southwark that has been designed by

SPPARC Architecture

. The lower floors here are reserved for the London Centre of Contemporary Music and are completely sound-proofed. The residential apartments start higher up in the remaining section of the building which has been twisted and — to avoid having a pillar under the corner jutting out — is set on a 1-metre-thick concrete slab to ensure adequate support. The exterior of the building has brickwork resembling musical notes and the apartments have hi-end furnishings with floor-to-ceiling windows. Penthouses set across multiple floors have private terraces offering terrific 360-degree vistas of the London skyline. Although only eight units are now left in this stylish project — five apartments and three penthouses at the time of going to print.

(The writer was in UK at the invitation of Taylor Wimpey Central London)