Thai investors in London should look beyond their comfort zone

Properties in these areas have become even more expensive, with prices now ranging from 2,500-3,000 pounds per square foot (Bt1.35 million to Bt1.63 million per square metre) in the Kensington area and well over 5,000 pounds per square foot for a top-end development such as One Hyde Park. 

If people can still afford Mayfair or Knightbridge’s premium pricing, then they can focus their purchases in these areas. However, investors focused on maximising returns and capital appreciation should explore new development areas that are beyond their obvious choices such as the City, King’s Cross, Victoria and areas on the other side of the Thames River such as Southbank. 

Many areas perceived as unattractive have gone through regeneration and overhauls and have now become or are becoming areas with great capital appreciation potential. One up-and-coming area that has been transformed over the last decade is the City and its fringes. 

The City is still thriving as a business district, but now boasts an impressive array of bars, restaurants and diverse retail offerings. New residents are being drawn into the area and it is becoming a highly sought-after residential location. 

Households in the City and surrounding areas are expected to rise substantially over the next decade. 

CBRE Research in London estimates it will exceed the rate of construction by 60 per cent. Given that demand is ahead of supply, we expect absorption rates to continue to rise. 

While the City has underperformed traditional areas of West London, this is now changing as price growths have outpaced prime Central London, with further room for growth. 

Prices have passed 2,000 

 pounds per square foot. In 2008, average values in prime London were 60 per cent above those in the City. Today, the gap is closing at just 30 per cent. 

Shoreditch is another area on the City fringe that has undergone one of London’s most marked revivals in the last 25 years. Previously characterised by print workers, clockmakers and metalworkers, the area is now occupied by information-technology, media and creative professionals.

It is becoming a popular rental district and innovation hub, home to everything from technology start-ups to small architectural firms. Prices of new development schemes under construction in this area range from 760-1,300 pounds per square foot. 

Other areas surrounding the City worth looking out for are Clerkenwell, Wapping, Bethnal Green and Whitechapel.

King’s Cross on the other hand is the best-connected transport hub in Europe. 

With an investment of 4.5 billion pounds for the area, there will be up to 30,000 people studying, living and working in King’s Cross by next year. 

Google is also relocating its headquarters to this area next year, reinforcing London’s position as a leading technology and research centre. 

It is clear that traditional prime boundaries are being pushed to new areas and Thai investors should not ignore these opportunities.

From a purely investment perspective, regardless of where your child studies in London or the convenience and lifestyle factor or personal preferences, it would make sense for investors to look beyond their comfort zone in terms of investment locations. 

The timing in terms of exchange rate is also favourable with the baht appreciating against the sterling and currently valued at 50 per pound. 

In terms of basic market fundamentals, London has always been a safe haven for investment with a strong legal structure, asset |protection and multicultural society. 

While there are tax considerations to keep in mind, the investment benefits tend to outweigh these concerns. 

 

Aliwassa Pathnadabutr can be reached at [email protected].