Sales and pricing Prime fringe
Almost 100% more units were sold in Tower Hamlets in 2012 than in any other inner borough. The second- best performance came from Wandsworth, at 675 units. But a detailed look at sales in the schemes that generated those units gives us further insight into the state of the market. Take, for example, Barratt/Circle Anglia’s St Andrews
development in Bow. The low-rise elements completed a while ago but the more prestigious and investor- friendly tower elements started in 2012 and have been subject to some considerable interest from investors,
not least due to the fact that the first tower, No 1 the Plaza, was initially launched in Hong Kong. We estimate that at the end of 2012 overseas investor
sales accounted for around 70% of the sales in this element. Similarly, in Ballymore’s 21 Wapping Lane, the tower element of the development, called The Tower and totalling some 173 units, went on to achieve at least 50% investor sales following an international release in 2012, compared with around 30% investor sales in the low-rise elements. Increasingly in these prime fringe locations, if it’s a tower, it’s aimed at the investor market.
VNEBOA
We have talked in the previous chapter of the importance of prestige when appealing to investors: build as close to the centre as you can; build tall; build next to the river, but also have good neighbours. Wandsworth saw a 93% increase in sales in 2012, due in no small part to one development launched in the year, St James’ Riverlight. Everything that was offered to the market was taken – some 350-plus units – at least 50% to international investors. The site is part of the Vauxhall Nine Elms Battersea Opportunity Area (VNEBOA).
Although our tables only detail sales in schemes
under construction or completed in 2012 it would be churlish not to mention the power station. Half of phase one homes at this site were allocated to Malaysian investors last year. According to reports from Asia, Tan Sri Liew Kee Sin,
the president and chief executive of SP Setia, which bought the power station with Sime Darby and EPF, claimed that deposits were collected for 400 studios,
flats and townhouses allocated to Malaysian investors at a preview held in December. Perhaps this extract from the Malaysian Sun Daily shows us just how strong international investor demand is becoming: “We had no brochures, all we had was a price list and people were queuing to pay deposits.” The drivers behind the VNEBOA may be slightly
different from elsewhere, not least the surety of gentrification bestowed upon it by the coming of the US embassy. Indeed, the embassy is not only having an effect on the residential prospects of the area; its gravitational pull is such that it has already attracted two other embassies to the vicinity – the Dutch and one other, as yet unnamed – with recent rumours that China intends to relocate its embassy to the area on the site of the 13-acre post office sorting centre to the west of the US embassy. This could be the start of a whole new diplomatic quarter which, in turn, could free up some truly super-prime stock in Mayfair, Belgravia, South Kensington, etc.
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