Why international investors continue to buy overseas property

The beginning of 2022 saw the London property market fly out of its post-pandemic starting blocks, before maintaining a steady and profitable pace for the next six months. At Benham and Reeves, we have been working hard to convert this new confidence into sales as international buyers return in force. The rental market has been boosted by the work from home revolution and the tendency for international students to arrange accommodation in advance of the school term.

With an ultra-competitive homebuying market and a huge shortage of housing options continuing to drive exponential rental demand across the Capital, investors are turning to proven property specialists like ourselves to navigate a way through what can only be described as a post-covid race for space.

For many investors, residential real estate means potential future income which they consider to be a good legacy and our international teams understand this well. It’s why our clients return to us again and again.  Working with top UK developers and world banks; displaying innovation, introducing the best investment opportunities and calming nerves is all part of the service. And now we are witnessing the fruit of our labours and here’s how 2022 is shaping up so far for our international offices.

Malaysia

Keen to protect their financial capital against sudden falls in value of the Ringgit, Malaysians are amongst our most intrepid clients, eager to explore London’s more peripheral districts in search of higher yields. This adventurous spirit has the full backing of Malaysian banks who have, in the first half of this year, provided loans for selected developments in zone 4: a massive vote of confidence. All this has come at a time when Malaysian interest in the Australian market appears to have waned, so despite increased Stamp Duty (UK tax on property) and recent interest rate rises, London property remains a big draw.

Off-plan success stories that have recently completed are Clarendon in North London, The Green Quarter and Horlicks Quarter on the London fringes – all have, over the last six months, been matched by deals in Berkeley’s new development in Oval Village. Yields have been healthy, varying from 4.5 to 5.5 per cent. On the lettings front, the fact that out of almost 300 properties owned by Malaysian landlords, only one is vacant at the moment is an astonishing statistic that speaks for our abilities to work cross-geographically with our London teams to make sure our clients get the best service.

Middle East and Africa

Clients from the Middle East and Africa are expecting great things from Grand Union and Millbrook Park – two developments that have reshaped their respective North-West London neighbourhoods. Our ability to match accommodation with suitable tenants, even before a property hits the market, has been a definite plus point over the last few months. This was the case in Grand Union – an ideal outcome for our client, who was able to see an almost immediate return on his investment.

Since last year, we have been able to demonstrate the extra flexibility that today’s market requires by pointing investors towards opportunities in the Swiss Alps. An accomplished presentation held at the Arts Club, Dubai resulted in some solid sales for the Andermatt project which will see healthy yields.

Overall, the appetite is definitely there for London investment and also for multiple purchases in one scheme.  One of our clients bought 3 apartments in Harrow as he was so impressed with the value for money there.

Singapore

Also showing interest in the Andermatt development were our Singaporean investors, who have emerged from lockdown with all their characteristic verve and energy. Although the war in Ukraine has impacted the global economic climate, our Singapore office is still fielding interest from clients who regard London as one of the safest of all havens. One particular individual had no hesitation about buying in Holland Park, despite the £4.2 million price tag: a big coup for our Regional Director Doris Tan.

Kevin Loo points to the fact that we are seeing clients from rival agents come over to do business with us, impressed, no doubt, by our local London knowledge gained over 60 years, our local accessibility in Singapore and global reach. Like our established clients, they are interested in the London areas that cluster around the new Elizabeth Line and deals have been struck with Royal Arsenal Riverside, Acton Gardens and even as far out as Bankside Gardens in Reading.

Lynne Geeves saw last year’s enforced down time as an opportunity to strengthen ties with our investor clients, staying in contact and reassuring them that their properties would remain viable and return to provide better income, once the restrictions were lifted. Our continued marketing programme which ran throughout the pandemic has paid off and now we have a younger Singaporean demographic that have started to buy in London – particularly in Zones 3, 4 and 5.  This is a new trend we are seeing where millennials with good disposable income are recognising that not only Mayfair and Knightsbridge can return good long term dividends.

South Africa

It’s early days yet for our nascent operation in South Africa, but due to the tireless work of our local team headed by Amina Bhayla, mortgage lenders, leading banks and even high-profile sports stars have sought out our expertise and knowledge as they prepare to make sizable financial commitments in the London market. Ever keen to promote strong business ties between the two nations, the British High Commissioner to South Africa has had no hesitation in recommending our services to anyone who expresses an interest in buying in London – high praise indeed!

Our Directors visited South Africa in May this year to host property seminars and one to one meetings with investors and many are keen to expand their portfolios geographically into new asset styles including new build apartments.  Here, investors are looking for a property partner who knows London well and can provide expertise from start to finish.  It has been exciting to see our client base growing here and for the confidence new clients are putting in our team and our sales and lettings services.

Hong Kong

Another place with strong historic ties to the UK is Hong Kong where we have had an office since 1995. Investors here are familiar with the various levels of property-related activity in the Capital. For them, the proliferation of exciting new developments in London is reminiscent of the seismic property booms that fuelled the unstoppable rise of their homeland. Shrewd, resourceful and driven, Hong Kongers have been looking to capitalise on rising prices by getting in early (off-plan) or looking for deals in fringe areas of London. Both of these tactics have been behind some of the most promising deals over the last half-year.

Widya Lestaluhu is confident that by quickly focusing on digital marketing, virtual tours and the hosting webinars, Benham and Reeves Hong Kong has emerged from the pandemic in a strong position. Evidence of this was the sale of nine apartments in Colindale worth £6 Million in total plus expansion into other UK areas, such as Reading, Manchester and Milton Keynes.  As we pass the halfway mark of 2022, the word that has been on everyone’s lips is “Diversification”, with Hong Kongers  far more open to consider emerging London locations than in the past. They see the way that Tier 1 UK developers are placemaking and realise that a fair amount of the country’s population will be long-term renters. The result will be healthy yields and negligible void periods.

India

A flurry of high-profile networking events has supercharged our operations in India. Introducers/partners were invited to attend meetings in Delhi, Mumbai and Pune with a view to educating investors in the opportunities and advantages that the London property market offers. Events were concentrated in the period between March and June and our office heads, Sushant and Dhanvee expect to see promising results soon. The two also visited London in June 2022 to carry out accompanied viewings of many of the properties they had been presenting in earlier events and webinars. There was plenty of interest in new build locations like Southall, Hounslow, Harrow and Acton – all areas very well known to the Indian diaspora and are undergoing considerable infrastructure transformation.  We’ve also seen a strong interest in Elephant & Castle area where new homes in the Elephant Park scheme have been attracting sales due to its zone 1 location and lower price. Some investors are also looking for holiday/second family homes with larger budgets targeting Mayfair and St John’s Wood.

“We’re taking business forward and diversification is a good way to protect your assets” says Anita Mehra, Managing Director at Benham and Reeves

“The international business community is made up of many investors who have a good working knowledge of the London property landscape. They know that the Capital’s property sector is fast moving and they also recognise that major infrastructural initiatives like The Elizabeth Line (Crossrail) will have a lasting effect on prices, housing availability and job opportunities. What they need in the coming months are capable and experienced professionals who will walk them through all the steps needed to ensure they get the best advice and can confidently reach their individual investment goals.

Our international offices are already building on the successes of the first two quarters of 2022 and are ready to assist anyone looking to explore options to invest in London property or enlarge their existing portfolio. Now has never been a better time to invest in London property.  Just ask us why!“

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