KUALA LUMPUR, April 20 — Wealthy Malaysians are one of the leading buyers of central London properties and, with their counterparts from China, Hong Kong and Singapore, snapped up one out of every two new homes in one of the world’s priciest real estate markets, reported Bloomberg today.
This comes after government-linked institutional investment funds went on a mini-buying spree of properties in the UK capital in the past one-and-half years with more than RM5 billion invested in London office buildings.
Bloomberg reported leading broker Jones Lang as saying today that investors from China, Hong Kong, Malaysia and Singapore accounted for 51 per cent of new property purchases in central London neighbourhoods (Kensington, Chelsea, City of Westminster, City of London, St. John’s Wood and Canary Wharf ) that the broker handled, up from 47 per cent a year ago.
Neil Chegwidden, a residential research director with Jones Lang, was quoted as saying that the interest in London was due to growing number of high net-worth individuals in the region looking for places to put their money.
London remains one of the most attractive places globally for the world’s wealthy to live and do business in, which has led to a resilient localised property market even as the rest of the UK faltered.
UK-based real estate marketing firms have been taking out full-page advertisements in Malaysian newspapers over the last two years and holding well-attended open houses in hotels as part of efforts to tap into the booming Far East markets as British investors moved to the sidelines in the wake of the economic crisis in Europe.
Bloomberg reported that the proportion of British buyers in central London fell to 19 per cent from 22 per cent in 2010.
Savills Inc director James Talbot was reported to have said in October last year that there has been an influx of Malaysian buyers for properties in central London in the last two years, driven by the favourable exchange rate and long-term investment appeal.
He added that there was a certain cachet for the wealthy to be able to own a property in the global financial hub, and the group had introduced some 20 projects in Malaysia in the last five years.
Apart from buying London property, many wealthy Malaysians also look to hedge their bets against local political and economic uncertainty by parking their money in what is perceived to be more secure and predictable countries such as UK, Australia and Singapore.
Government-linked institutional investment funds such as the Employees Provident Fund (EPF) and Permodalan Nasional Berhad (PNB) have also bought over RM5 billion worth of London property over the past one-and-half years alone.
PNB spent over RM4 billion to acquire three London properties — One Exchange Square, 90 High Holborn and Milton and Shire House — and is reportedly on the lookout for more purchases.
EPF has plans to invest nearly RM5 billion in London property and has so far picked up 12 St James’s Squares for RM740million, One Sheldon Square for RM768 million, and 40 Portman Square for RM886 million.
Malaysian property giant SP Setia is also looking to break into the London scene and is reportedly looking to make a fresh bid to redevelop London’s 39-acre Battersea Power Station site after its bid was rejected last year.