Sterling bargains for Asian buyers

The falling British pound has made London and other properties in the United Kingdom a bargain for Asian buyers, and its little wonder then that property agents are beating a path here to sell real estate.

International property consultants Savills yesterday offered 52 units of one of London’s most iconic apartment buildings, Strata SE1, to potential buyers here for an average of £781 ($1,580) per sq ft, with studio units with a floor area of 34 sq m going for £230,000.

Several penthouses of about 178 sq m are being offered at around £2.5 million each. Savills is also marketing these apartments in Hong Kong.

Designed by BFLS, the same people who did London’s famous Gurkhin, the 43-storey Strata rises 140m above the popular Elephant and Castle area.

Its most striking feature is its trio of enormous integrated wind turbines at the top, the first of their kind in the world, which provide about 8 per cent of the building’s energy.

All 403 units were sold out at their launch in 2007 but financing problems led to 52 buyers not being able to close their deals.

Savills said that, when it was launched, British banks were willing to finance up to 90 per cent of the apartment’s value but are now able to provide no more than 70 per cent.

“This caused problems for some buyers but at the same time has allowed Asian buyers the opportunity to own these exclusive apartments,” a Savills spokesman said. He also pointed out that British banks favoured Asian buyers and were willing to provide up to 80-per-cent financing and on better terms, depending on their standing.

“They can get (interest rates of) between 3.2 and 3.8 per cent, compared with local terms of around 6 per cent,” he added. Savills also noted that OCBC Bank has been brought in to provide potential buyers Singapore dollar financing at around 2 per cent.

In sterling terms, prices are about what they were in 2007. But with the pound having fallen from about $3 to only $2 now, Singapore buyers will be getting more than a 30-per-cent discount, Savills pointed out.

Rental yields are around 6 to 7 per cent.

“Now is the best time to buy into prime London properties, given the strong Singapore dollar against sterling,” said Mr Julian Sedgewick, a Savills director.

“Capital appreciation upside based just on currency play alone is phenomenal. If you add in the current low borrowing and savings interest rates plus the usual increase in property valuation and rental returns into the equation, the potential overall capital appreciation could be staggering.”

Source : Today – 14 Jan 2011

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