London remains attractive to experienced Malaysian investors

The UK property market was at its height and really booming when I joined Benham and Reeves in the middle of 2016. This was before Brexit when we were experiencing exciting times whereby real estate agents could close double digit sales on any weekend exhibition showcase of UK or London properties.  Fast forward: Britain left the European Union and some regulation changes also took place and now most of the world is in the midst of recovery from the economic impact of the covid pandemic.

Indeed alot has happened over these six years since I joined the company but it has been extraordinary to see the resilience of the London property sector despite all the upheavals. I refer to the UK as a “bullet-proof” investment because even in unprecedented times like these, not too much has impacted investors. Many investors in South East Asia still believe it to be one of the best and safest asset class to protect their capital and as a hedge against currency. With the banks now reducing interest rates to between 1%-2% and the ever-increasing likelihood of inflation, many investors in South East Asia are looking at shifting their funds to UK and London property which can provide up to 4% – 4.5% gross yield in terms of rental return on investment. They can also enjoy good capital growth over the long term for when they decide to sell.

Why do Malaysian investors favour London as an investment?

A legacy of being part of the British Commonwealth means that a large population of Malaysians were educated in the UK.  This connection that dates back to pre-independence has led many to send their own children to study in a Britain they already feel part of. Malaysians like to have a second home in London and for many its not a question of if, but when.

Looking to our other international office regions and comparing the types of overseas investors we work with, Hong Kong and Singapore are unique in a sense because they are island/city states, thus prices for local properties in these regions are more on par if not higher than most parts of London. Thus it is not surprising that many Hong Kong and Singaporean citizens opt for London as their first investment property. While in Malaysia, local properties being in Ringgit Malaysia with a lower price range, Malaysians tend to opt for local Malaysian property as their first purchase. And as they work their way up the investment cycle, Malaysians will start exploring overseas properties with the UK top of their wish-list.  Brexit has been a slight blessing for investors in our international office regions, as the pound weakened and property prices remained subdued from 2016 to 2019 we have seen a healthy uptake of property transactions during these period.

Has Brexit affected the buying habits of your Malaysian clients?

Definitely it has. Brexit coupled with the availability of technology and ease of gathering information and research these days, has turned many individuals into highly informed, savvy investors. But many recognise the value of having a good Agent who they can trust and turn to when they are looking to buy or sell. Our investor clients drill-down very specific questions and often compare products throughout London, from location, to price, to rental rates, down to very personal queries like rating of schools in the area. However, first-hand knowledge can only be given by those who are in the know.  Things like local traffic concerning school runs, weekend parking, the quality of certain facilities such as the local gym – this is what we call ‘real-time’ data and this is not only acquired from selling London properties for 60+ years, but providing hands on letting and property management. Dealing with day to day matters of our clients’ properties and working alongside our London teams, provide us with a unique edge in terms of the quality of service that we provide and our Malaysian clients do really value this seamless cross-geographical service.

When acquiring or investing in a UK/London property with Benham and Reeves, our relationship with the purchaser continues many years even after the handover and completion process of the property is finalised. From our office here in Kuala Lumpur we work together with our London lettings teams in renting out the unit for our investors and purchasers. We are always extremely careful in our recommendation and selection process of properties for investors, as we are involved in the entire lifecycle of the property.

Unlike other agencies who sell, and their job ends when the property is completed, and the lettings and rental is being done by someone else, we oversee the entire process. So we often work backwards, sort of like a reverse engineer,  understanding the rental market in the local area, vis a vis the prices of properties being sold. We look at projecting actual yields the landlords can achieve and research any potential upsides in the long-term in the area. We look at the specifics of boroughs undergoing regentrification upgrades, future planned infrastructure investments coming into the area etc. thus helping our clients get their returns on yield and riding the capital uplift wave.

Is there any investment advice you wish you had taken yourself?

Investors who have purchased between the years 2008 to 2013 have made good gains on their London property assets as these were key years of exponential growth in most parts of London. For myself, I wish I had jumped into the first phase launch at Battersea Power Station. The project has a notable Malaysian developer and as a unique River Thames landmark, there is a rich history to the site. It has a great location, south of the River, near to Battersea Park and within walking distance of one of my favourite London streets, the Kings Road, Chelsea. And of course for those who have invested early here, they have achieved the capital uplift and some have successfully sold their unit, making excellent gains. Renting is popular here and we have a Nine Elms branch here so this works very well for us to assist our clients who own properties here.

A great service is important

I think our strength as a business is that we are one of very few London based agencies who have a fully-fledged local team here in KL since 2013. With our 60+ year old company heritage and 18 London-wide branches, we are able to leverage on the real time data and wealth of knowledge between us. We are able to assist landlords on all property service matters from sales and acquisition, letting and managing their property, to furnishings or full refurbishment which involves doing an entire interior dressing out of their unit to generate maximum returns and monetise the asset as soon as it becomes available. We also assist with tax matters including submitting Tax Returns for overseas investors.

Looking after a property through its lifecycle is what we do best so with working with well researched on-the-ground data always at our fingertips, we are quickly able to recommend and provide the best investment opportunities and a tailored advice. This involves sourcing property products to investors specific budget and requirements.  “Get it right the first time.  Every time”  that’s my motto!

Please contact me if you have a property to sell or are looking to buy or let, I can provide a free market appraisal or help with any aspect of investment in London or the UK.