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Singaporean Investors Shape the Future of London

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United Kingdom  Singapore  China  Lloyds Banking Group  London  Savills  Battersea Power Station  Boris Johnson  Rob Perrins  Oxley Holdings  Royal Wharf  Berkeley Group Holdings Plc  Rothesay Life  Ching Chiat Kwong  Temasek  Stephen Down  Central London Investment 

Singaporean Investors Shape the Future of London

By - Thursday 07 November 2013

The future of London appears to lie in Singapore, if recent dealings in the investment sector are anything to go by. Indeed, it seems the UK's capital is a prime stomping ground for overseas buyers and Singapore is leading the pack both in the private and institutional sector. Oxley Holdings Limited's recent acquisition of Royal Wharf is further evidence of investor interest and confidence in London. The Singapore-listed property developer has obtained the largest mixed-use site to go on the market since Battersea Power Station, and will be in charge of one of the city's - indeed the UK's - most important development opportunities.

Transactions such as this are quickly shaping London, enabling it to grow its economy and expand into new territory. Mayor Boris Johnson is all too aware of this and recently travelled to China in a successful bid to bring in more investment. Speaking following the sale of Royal Wharf, he said: "My team and I met with Oxley Holdings on our trade mission to China last month and I am thrilled at this demonstration of their confidence in our great city. This type of deal is exactly why I spent six days meeting businessmen and officials in China banging the drum for the capital, and it is further evidence of the colossal appetite of developers from the far East and elsewhere to invest in London."

When complete, the 40 acre Royal Wharf site is expected to be turned into around 3,400 residential units and a variety of commercial, retail, leisure and educational facilities. By creating an entirely new district for London and increasing housing supply, Oxley Holdings is ensuring the capital is capable of supporting itself in the future. Ching Chiat Kwong, chief executive of the company, noted: "Royal Wharf is an outstanding opportunity and offers a blank canvas to create something very special for London. It has over 500 metres of river frontage with a Crossrail station 1km away. Oxley now has the opportunity and responsibility to deliver this fantastic project, picking up the baton from Ballymore."

Oxley isn't the only Singaporean company to take an interest in London and two of the country's main government-linked investors, Temasek and GIC Private, have set their sights on Europe this year. The Financial Times explained the UK's financial sector recovery has created plenty of opportunities. Indeed, GIC has taken a 28.5 per cent stake in Rothesay Life, while Tamasek took a one per cent stake in Lloyds Banking Group. It was also reported by the newspaper in August that GIC was in talks to buy half of Broadgate, which, if it comes to fruition, will constitute one of the biggest property deals since the financial crisis.

Privately, the London housing market is attracting plenty of attention from Singaporeans. Berkeley Group Holdings Plc's managing director Rob Perrins explained to Bloomberg the strength of the Singaporean dollar is helping this trend. "People like property, it's bricks and mortar, especially at the moment with the Singapore dollar so strong against the pound," he said. However, buyers aren't flocking to the capital merely on a whim. "Singapore investors are very savvy," Mr Perrins noted. "A lot of Singaporeans know London better than many Londoners do. They do a lot of research before they buy."

As more and more Chinese financial institutions enter London over the next decade the environment is likely to become even more interesting to investors. According to Savills, two million square feet of office space could be taken-up by the businesses during the coming ten-year period.

Stephen Down, head of Central London investment at Savills, said: "China's financial sector grew from 472 per cent of GDP in 2008 to 612 per cent in 2011, and this number is expected to reach almost 800 per cent in 2016.  Chinese investment into the West has been speculated to exceed USD 1 trillion by 2020. Boasting the largest institutions in the world, demand for requirements in the City of London are anticipated to be registered as these businesses become more integrated into the global economy." Not only will this have ramifications for the financial sector, but it will change the way London grows and is likely to attract more Asian investors into the area.

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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.

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