Singapore investors set their sights overseas

Artist’s impression of Royal Victoria Residence in London.

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UK residential property among top targets for Singapore investors.

While foreign investment in Singapore has increased tremendously on the back of mega deals such as Qatar Investment Authority’s purchase of Asia Square Tower 1 for US$2.45 billion, domestic investors remain focused on diversifying their exposure overseas.

According to recent reports by analysts, Singapore investors are allocating more capital to real estate worldwide, with the US, UK and Germany being among the top destinations.

“Asia’s biggest spenders are from Hong Kong (US$4.9 billion), Singapore (US$4.1 billion), South Korea (US$1.9 billion) and Japan (US$1.6 billion). Almost all their capital targeted the world’s three largest and most liquid real estate markets, with the US receiving US$10 billion, the UK pocketing US$6 billion, and Germany US$2 billion,” JLL said.

Some of the reasons cited for Singapore investors’ interest in overseas residential property markets include diversification benefits as well as greater affordability and the opportunity for steady long-term returns.

Stability and affordability

But why does UK real estate continue to top the list for Singapore investors? A growing population, a chronic housing shortage and a resilient economic picture all combine to paint a picture of long-term stability for the UK as a whole. That said, certain regional cities and outer areas of London are worthy of special attention.

Of course, one of the many reasons why the UK appears to be an attractive destination for investment, particularly for foreign direct investment, is because real estate is now effectively cheaper due to the depreciation of the British pound, presenting greater buying opportunities.

Where to look

For property investment specialists IP Global, well-connected areas in Outer London present significant potential. They encourage investors to target locations with a robust local economy, a growing population and to focus on specific districts that are set to be transformed – either by regeneration or through transport infrastructure investment.

The Royal Docks in East London are worthy of a closer look. Inspired by the success of Canary Wharf, the masterplan for the Royal Docks will create a third major financial district for London, connected by advanced transport infrastructure. Amounting to some GBP22 billion of investment potential – this is the UK’s number one regeneration project for the next 25 years.

Asian investment is already at the heart of The Royal Docks’ transformation. One of the key investments driving confidence in the development of the Royal Docks is the Asian Business Port (ABP) Enterprise Zone, a new GBP1.7 billion centre for commerce that is being backed by the UK government. Construction started in June on phase 1 of a project which will deliver a new hub for businesses from Asia looking to reach new markets in the UK and Europe.

Once complete, the 4.7 million sq ft ABP development will comprise mainly offices with residential, retail and public spaces, and is set to create an estimated 60,000 new jobs and 15,000 new homes.

Directly across the Thames from the Royal Docks is the iconic O2 Arena.

Why invest in The Royal Docks?

Seamless connectivity and reduced journey times

Set to change the way people travel around London and the south east, the new Custom House Crossrail interchange – a major hub just a three-minute DLR ride from Royal Victoria Station, is set to open in 2018 and will not only significantly cut journey times, but it will also allow commuters to travel right into the centre of London without having to change trains.

The current travel time from Royal Docks to Heathrow Terminals 1 to 3 is approximately 71 minutes, while travelling to Bond Street will take about 24 minutes. But once the Custom House Station is operational, travelling time will be reduced to 45 minutes and 17 minutes respectively.

The new Custom House Station will also be the main stop for many visitors to the ExCeL Conference Centre.

Aside from Crossrail, Royal Docks is also home to the Docklands Light Railway (DLR), London’s most advanced form of automated transport. Royal Victoria Station, which is located just a two-minute walk away, can link commuters to Canary Wharf and the City. Through the DLR, commuters can travel to the upcoming Asian Business Port in just seven minutes, and to the London City Airport in 13 minutes.

Potential for capital appreciation

According to analysts, Crossrail is set to have a huge impact on house prices. “Prices within 10 minutes of the new station at Custom House rose 46 percent between Q1 2013 and Q2 2015 – more than two-and-a-half times the average growth recorded across all stations on the route.

“Moving forward, with all the regeneration going on around the Royal Docks, it’s very clear that this excellent performance will continue as the area develops into a new premium district for the capital. While residential capacity in the area is certainly on the rise, supply is thought to be well within the limits of expected demand; the area’s popularity is already growing among buyers and renters attracted to luxury living at a prime waterfront location within easy reach of Canary Wharf and the City”, shared Hamish Pound, Head of Investment at IP Global.

“Properties around Custom House Crossrail station are expected to see house price growth of 29.5 percent and rental growth of 27.4 percent between the end of 2015 to the end of 2020 alone, providing a solid investment case for the area,” Pound continued.

Local amenities

The Royal Docks are commutable to various reputable educational institutions including the University of East London, King’s College and Queen Mary University of London. For entertainment pursuits, visitors can look forward to a waterfront promenade, a dockside park and garden as well as a variety of bars and restaurants – all of which are connected by a pedestrianised area to keep in tone with the tranquil pace of the waterside.

Other landmark projects such as ExCeL London, Royal Wharf, Silvertown Quays, The Crystal and the Asian Business Port are also located within proximity to the Royal Docks.

Hub for business and trade

Other major investments around the Royal Docks include the GBP3.5 billion Royal Wharf, a mixed-use development on the banks of the River Thames, and the GBP3.5 billion Silvertown Quays, which will deliver a new innovation quarter that is expected to create over 9,000 new jobs and boost the UK economy by GBP260 million. A wider regeneration masterplan for Canning Town and Custom House will see a further GBP3.7 billion of investment transform the area to the north of the docks over the next few years.

And all this is happening directly across the Thames from Greenwich Peninsula, home to the now iconic O2 Arena. Fast becoming a major attraction in itself, the Emirates Air Line cable car spans the Thames between Greenwich and the Royal Docks, which at peak hours carries nearly 2,500 passengers an hour between these two thriving cultural centres. Newham already stands out among London’s boroughs, boasting the second youngest population in the city. The development underway in the south of the borough will leverage this demographic profile, attracting swathes of London’s young professionals with modern convenience laced with vibrant culture.

Royal Victoria Residence

For those who are planning to invest in a property within London’s Royal Docks, they can consider getting a unit at Royal Victoria Residence, which is slated for completion in March 2018.

Strategically located in the heart of Royal Docks, this 23-storey tower development, with its striking architecture, is one of the most stunning residential developments that one can find within this area. Developed by City & Docklands, one of the key selling points of this development which comprises a good mix of one- to three-bedroom apartments and penthouses ranging from 652 sq ft to 1,414 sq ft in size, is the panoramic views that residents can admire via their balcony, terrace or sun lounges. Ideal for owner-occupiers as well as investors, each unit has been expertly designed and outfitted with impressive features including fully-integrated kitchen appliances, promising inhabitants an unrivalled living experience.

For more information, visit www.ipglobal-ltd.com/en/our-properties/royal-victoria-residence/

Disclaimer: All forms of investment carry risks, including the risk of losing all the invested amount. Such activities may not be suitable for everyone. This is an overseas investment. As overseas investments carry additional financial, regulatory and legal risks, investors are advised to do the necessary checks and research on the investment beforehand.