Last year, property agency Savills Rahim & Co introduced the first phase of NEO Bankside, a British property located in prime central London, to Malaysians.
The first block, known as Pavilion A, had prices starting at £1,000 per sq ft for a one-bedroom apartment of slightly more than 500sq ft.
It did seem pretty steep when most of the British properties being marketed in Malaysia were priced at about £200,000 for a one-bedder. Nonetheless, of the 80 units that comprised block A and B, Malaysians bought 10 units of NEO Bankside.
About two weeks ago, the agency marketed the third block. Prices have upped about 10% to 15% from last year. Located south of the River Thames, NEO Bankside is located in South Bank, in an area that runs along the southern edge of the Thames from Westminster Bridge to London Bridge.
Jointly developed by Native Land Ltd and Grosvenor, the 200-unit project is located in what is known as the cultural hub of London.
Gray was in Kuala Lumpur recently to touch base with buyers from the previous phase and to unveil the third of the four-block project.
Native Land development executive Nicholas Gray says notable features in the vicinity include art museum Tate Modem, Blackfriars Bridge and Station which spans the river, a new mall One New Change which is due to open in 2012, a second Hilton hotel with 280 rooms and the Borough Market, known to be London’s oldest market.
The area of South Bank has undergone tremendous change over the last 10 to 15 years. Similar with what’s taking place in several parts of London, NEO Bankside is part of the huge regeneration process that is under way there.
Like other parts of the capital undergoing regeneration – where old derelict buildings are torn down and new buildings take their place – South Bank has over the years boasted some of the finer names in architecture.
The catalyst for the area is Tate Modem, formerly a derelict power station. Today, the art museum receives millions of visitors every year.
The other catalyst is the Millennium by Sir Norman Foster. (Foster designed the Troika, a project by BRDB Bhd in the KLCC area).
A new mall One New Change, about 10 minutes walk from NEO Bankside, will be another landmark in South Bank. The most ecclesiastical of NEO’s neighbour will be St Paul’s Cathedral across the river.
South Bank and its surroundings on both sides of the Thames have brought together some of the most famous architects. Among them Sir Christopher Wren (St Paul’s), Tate Modem (Giles Gilbert Scott and Jacques Herzog) and Richard Rogers for NEO. Rogers is also the architect for One Hyde Park, one of the most upmarket real estate in London at £6,000 psf.
Gray says the main qualities of NEO Bankside are its quality, both in terms of design and construction, its location in the city by the river and the landmarks around it, on both sides of the Thames.
Says Gray: “There is a lot of development by the river. Some of them will become landmarks in years to come.”
Native Land is specifically a prime central London developer, which is different from a house builder.
In Malaysia, when one buys into a project, most of the time, if not all the time, it is a project undertaken by a developer. In England, the situation is slightly different. There, developers and house builders also undertake projects.
Both Native Land and Grosvenor are developers. Native Land was formed seven years ago by the former senior management of Taylor Woodrow Capital Developments and it is today a residential and mixed-use developer.
Grosvenor’s expertise is in prime London residential market and it has total assets worth £12.6bil.
NEO Bankside is located in what property consultancy Knight Frank says is a maturing market. In its review of South Bank, its head of residential research Liam Bailey says South Bank has succeeded in creating its own identity and cemented its reputation as London’s cultural hub, a sentiment reflected in its contemporary architecture and physical landscape.
He says residential demand on South Bank is currently identifiable from two key sources – overseas purchasers and cash-rich domestic buyers.
“The weaker pound alone has created a compelling buying opportunity for international purchasers,” the report says.
A significant driver for investment comes from educational requirements.
South Bank is within a 30-minute tube ride of seven universities including The London School of Economics, Central St Martins and Goldsmith’s.
Most of the Malaysians who have bought British properties do so because they have children studying there. Other international buyers invest for the same reason. Over the past decade, the number of international students studying in Britain has risen by 175%.
The strongest growth comes from China, India and Pakistan. The number of Chinese students rose 11.7 times from 4,017 in 1998/99 to 47,035 in 2008/09.
In many cases, investors look to buy to cover the period of their child’s stay at university, and the properties are then retained as a long-term investment, the Knight Frank report says.
Diversification is the other reason for their investment. Many view the current global financial crisis as a once-in-a-lifetime event and the fall in the Sterling presents itself as a buying opportunity.
With fears of price bubbles in China, Hong Kong, Singapore and even in Malaysia, governments in these countries have already taken steps to cool the prices.
“Their success, or otherwise, will have repercussions for the central London market. Initial feedback from our Asian teams suggests that there is a strong potential for the negative impact of lower housing wealth in Asia to be at least partially offset by a desire for investors to target safe haven locations such as London,” the report says.
By The Star
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