Asian buyers gobble up London property

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One of London’s landmarks, the Battersea Power Station, was sold to a Malaysian consortium comprising of SP Setia and Sime Darby in June 2012

Property buyers from Southeast Asia account for  a growing share of residential and commercial property purchases in London.

Of the £30 billion that have been invested since the beginning of 2012 due to foreigners seeking perceived safe havens, 10 per cent were Malaysian buyers, according to estimates by global real estate service provider Jones Lang LaSalle. There is also rising demand from Thai and Singaporean buyers.

Malaysian investors started becoming the leading buyers of London offices for the first time in July 2012, a position supported by a deal to buy the Battersea Power Station in London by Malaysian developers SP Setia and Sime Darby, as well as Malaysian investment fund Permodalan Nasional Berhad’s £570 million acquisition of two office buildings housing the European Bank for Reconstruction and Development.

The Financial Times pointed out that another key reason for the growing number of Malaysian investors looking towards London is Malaysia’s own strong performance domestic pension funds and the fact that the country’s stock and bond markets are too small to accommodate them, forcing investors to look elsewhere. Another reason are healthy returns at 5 per cent in average.

Altogether, Malaysians bought £1.3 billion of London property in the first seven months of 2012, more than British buyers and beating the US into second place among overseas investors with £793 million, a research by property consultant CBRE Group showed.

There has been a major shift in investor origin over the past months. Russian and Emirati buyers who have long propped up the London market are starting to take a back seat to East Asian demand.

Apart from Malaysia, Thai property investors are increasingly looking for a share of the London property pie. Thai investors have poured nearly £200 million in investments in the first nine months of 2012, said Kongkiat Opaswongkarn, chief executive of Asia Plus Securities in Bangkok.

One of the most popular property among Thai buyers has been the new residential development or Fitzroy Place in Central London, according to Robert Collins, CEO of Savills Thailand.

Thais tend to buy cash whereas Singaporeans and Malaysians are more likely to take out a loan to facilitate their investment, Collins said.

Southeast East buyers are also attracted to London’s property market by the weakness of the pound, and the fact it is a liquid and transparent investment in a relatively stable political environment, often providing better returns than Asia’s more volatile and smaller markets.

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Reading Time: 2 minutes

One of London’s landmarks, the Battersea Power Station, was sold to a Malaysian consortium comprising of SP Setia and Sime Darby in June 2012

Property buyers from Southeast Asia account for  a growing share of residential and commercial property purchases in London.

Reading Time: 2 minutes

One of London’s landmarks, the Battersea Power Station, was sold to a Malaysian consortium comprising of SP Setia and Sime Darby in June 2012

Property buyers from Southeast Asia account for  a growing share of residential and commercial property purchases in London.

Of the £30 billion that have been invested since the beginning of 2012 due to foreigners seeking perceived safe havens, 10 per cent were Malaysian buyers, according to estimates by global real estate service provider Jones Lang LaSalle. There is also rising demand from Thai and Singaporean buyers.

Malaysian investors started becoming the leading buyers of London offices for the first time in July 2012, a position supported by a deal to buy the Battersea Power Station in London by Malaysian developers SP Setia and Sime Darby, as well as Malaysian investment fund Permodalan Nasional Berhad’s £570 million acquisition of two office buildings housing the European Bank for Reconstruction and Development.

The Financial Times pointed out that another key reason for the growing number of Malaysian investors looking towards London is Malaysia’s own strong performance domestic pension funds and the fact that the country’s stock and bond markets are too small to accommodate them, forcing investors to look elsewhere. Another reason are healthy returns at 5 per cent in average.

Altogether, Malaysians bought £1.3 billion of London property in the first seven months of 2012, more than British buyers and beating the US into second place among overseas investors with £793 million, a research by property consultant CBRE Group showed.

There has been a major shift in investor origin over the past months. Russian and Emirati buyers who have long propped up the London market are starting to take a back seat to East Asian demand.

Apart from Malaysia, Thai property investors are increasingly looking for a share of the London property pie. Thai investors have poured nearly £200 million in investments in the first nine months of 2012, said Kongkiat Opaswongkarn, chief executive of Asia Plus Securities in Bangkok.

One of the most popular property among Thai buyers has been the new residential development or Fitzroy Place in Central London, according to Robert Collins, CEO of Savills Thailand.

Thais tend to buy cash whereas Singaporeans and Malaysians are more likely to take out a loan to facilitate their investment, Collins said.

Southeast East buyers are also attracted to London’s property market by the weakness of the pound, and the fact it is a liquid and transparent investment in a relatively stable political environment, often providing better returns than Asia’s more volatile and smaller markets.

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