Ultra high net worth individuals from India spent £1bn on luxury homes in London last year
Wealthy Indian investors have ploughed £1bn into the prime central London property market over the last 18 months, and are expected to spend another £500m on redevelopment in the next five years.
Indian ultra high net worth individuals have turned their backs on a faltering real estate market in their home country and are buying up superflats, estates and hotels in London – according to a new report from luxury property agents, Wetherell.
This group of investors, second only to British-based buyers, spent almost £450m purchasing 221 residences in prime central London in 2013, with the top three most popular locations being St Johns Wood, Belgravia and Mayfair.
British buyers accounted for 30pc of property in Mayfair, while wealthy Indians have snapped up 25pc. Middle Eastern, continental European and Russian buyers all accounted for 13pc of purchases each in the exclusive London borough.
At the height of British summer some 3,000 ultra high net worth Indian families escape the heat of Delhi and relocate to Mayfair, but they are also moved by London’s status as a global, investment safe haven.
Despite a strengthening pound, which is eroding the currency advantage of buying in Britain, the UK capital is still perceived to be a stable investment, and has attracted funds since the global financial crisis when investors started to turn from complicated financial structures towards tangible investments.
As the Indian economy remains under stress, residential real estate prices have been surging in an unprecendented manner, unlike income levels which are not rising, and making London more appealing.
“Many have chosen to invest in Mayfair, especially in Grosvenor Square, because they can see that currently the district is undervalued compared to neighbouring locations such as Knightsbridge and Belgravia. There has been a spectacular 314pc rise in sales values in Grosvenor Square since 2000, surpassing values such as Eaton Square [below] and Cadogan Square,” said Peter Wetherell, founder of Wetherell.
Aside from private money, Indian developers are also entering the London market. The Lodha Group, India’s largest residential developer, has recently purchased the Canadian High Commission in Grosvenor Square for £306m. The group plans to turn the seven floor 135,000 sqft High Commission into 18 to 20 luxury homes.
“It is not surprising that Indians are buying in London, their prefered postcode as always been Mayfair, and it fits with their resonance with British luxury brands,” said Adam Challis, head of residential property at JLL. “More interesting is the strategy by developers such as Lodha who are diversifying into international markets, and London is of course the first port of call.”
This report on foreign direct investment into London property coincides with news from UK agents Knight Frank who have today warned that the Capital needs to spend £154bn on new homes to match the expected surge in population taking it to from 8.3m now to 9.4m by 2022.
Via : telegraph.co.uk