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Real Estate Knowledge

It’s 2021: Where Can You Invest in the London Property Market?

  • The mortgage approval rate is up 827% since last year.
  • Stamp duty has been waived – saving buyers up to £ 15,000
  • Retail investment is up £290m in 1 month

The UK offers relative stability and transparency, with London at the core of it’s market as one of the major metro areas of the world.

A hub for overseas property investment, the demand foreign buyers have been responsible for as much as a 20% increase in prices. The city is home to millions of immigrants and is often the primary choice of investors due to its geographically convenient location and growing scope of opportunities.

Stamp duty has been waived for the bulk of 2021, releasing the pent up demand from Covid.

A quick history…

Pre-pandemic, Prime Central London (PCL) prices suffered due to “higher rates of stamp duty and political uncertainty,” cites a 2019 Knight Frank report, pushing the average price for existing homes below their 5-year average.

Property in popular neighbourhoods fell up to £200/sq foot below average: Hyde Park, St John’s Wood, Chelsea, South Kensington, Kensington, Belgravia, Knightsbridge and Mayfair in PCL ranged between £1,000 to less than £2,000/sq foot.

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Covid-19 made an immediate, obvious impact throughout 2020, with an initial crash followed by volatility, spurred by quarantine and mass uncertainty. However, in March of this year – 2021 – property transactions were the highest in a decade in Prime Central London. In other words, the property market was at its most active in the last 5 years.

Price growth began at the beginning of 2021, and demand will continue to grow as travel eases, vaccines take effect, and investors realize the opportunity to break in before supply is snatched up at a premium.

This image has an empty alt attribute; its file name is London-house-prices-map-1-1024x612.png
London remains a strong investment location for capital appreciation assets. 

The demand for properties in the city still grows, and investors are encouraged to view it broken down in the 5 main areas mentioned below:

  • Central London
    • West End, Covent Garden, South Bank, London Bridge, Chinatown, City of London;
  • North London
    • Barnet, Enfield, and Haringey;
  • South London
    • Bromley, Croydon, Kingston upon Thames, Merton, Sutton, and Wandsworth;
  • East London
    • Collondale, Saxilby, Brookville;
  • West London
    • Popular neighbourhoods: South Kensington, Notting Hill, Fulham, Hammersmith, Shepherd’s Bush, Kew, Twickenham;

As far as investment goes, reallymoving.com suggests the following areas in terms of pricing, transportation, environment and other factors that are to be considered pre-purchase:

  1. Barking and Dagenham
  2. Havering
  3. Leyton
  4. Battersea
  5. Bloomsbury

They also have this article on organizing a home move to London.

A large construction project in Battersea, London.

Wile London is on track to recover from its a recent turbulent timeline, smaller metro areas and submarkets are increasingly being viewed by investors for their higher yields, watch our quick video on that here.

For more information on London, there are easily accessible market reports from the London Datastore – a public database – here.

This just the beginning of the conversation

At Denzity, we publish personal finance and investment articles for the young professional. If you have any questions and comments, write them below or reach out to our team here. Stay tuned for more investor focused content, financial advice, and industry updates.

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Real Estate Knowledge

TOP 4 SOLID REASONS To Buy UK Property

Before purchasing any overseas property, investors must consider the advantages of the UK market. The country boasts the 4th best property market in the world, and is a strong buy.

1. Variety of Options

London Metro Area. The Northwest. East Midlands. Scotland. The UK boasts a wide variety of property that is often overshadowed by exorbitant prices in posh residential neighborhoods.

In fact, the laws of supply and demand give investors options from houses in Durham for under £ 60,000 pounds to an extravagant £ 13 million pound home in Belgravia. In other words, you can break into the market with under $100,000 USD.

This variation among asset classes means different ROIs based on your risk profile and long-term goal. For example, Even in the famously expensive London market, there is a wide variety of prices.

Multi-million pound homes in Knightsbridge and Westminster draw attention away from the surprising affordability of other London districts.

2. Extensive Transport Infrastructure

With over 70 airports, 40 major ports, excellent rail links, and toll-free motorways, the UK offers residents strong transport links. The connection between suburban and rural areas rank high among EU members and are only strengthening. On top of domestic railway lines, Eurostar also links the UK to the rest of Europe.

In May 2021, the Transport Minister has revealed plans to inject £401 million pounds into transport infrastructure. New stations will be built along the northern Transpennine route, especially between Leeds, Manchester, and York, along with upgrades between York and Church Fenton.

Record levels of transport investment will promote new property markets.

The respective locations’ real estate prices will mushroom as the investments in infrastructure are realized over the next few years, and have already seen surges in market energy.

3. Post-Covid Bounceback

Despite a new stamp duty for non-residents, property firm Strutt and Parker is predicting higher transaction volumes than last year. In fact, they have released a five-year forecast which estimates up to 35% growth.

On top of that, Prime Central London’s lettings have seen a YoY decline of -6.7%, compared to a worst-case prediction of -10%. While market indicators do not match pre-Covid peaks, they indicate a slow return that still offers an opportunity for investors to break in.

London is among one of many markets that is expected to bounce back.

The sector can see continued government support through planning system reforms and increasing demand for new-builds between homebuyers and investors.

4. Strong International Community

The UK and its popular metro areas have consistently attracted foreigners. So much so, that King’s College research shows foreign investment is responsible for prices being 3 times higher than they otherwise would be.

The country is home to millions of immigrants and is often the primary choice of investors due to its high level of internationality. In fact, only 20% of investment volume is purchased by UK citizens. In the same 2021 JLL market report, the research breaks down the purchaser nationality into the following percentages:

  1. USA: 36%
  2. UK 20%
  3. Hong Kong: 12%
  4. Czech Republic: 10%
  5. Germany: 10%
  6. China: 4%
  7. Other: 7%

The markets of the “new normal” are on a shaky recovery, though still offer plenty of options for professionals to invest their hard-earned cash. Going forward, policy changes in EU relations or stamp duty is sure to impact property prices, and our future publications will keep you up to date on property trends to be aware of in the UK.

Now that you’re here…

At Denzity, we help international investors find their next property. If you have any questions about your next purchase, reach out to our team, here. Stay tuned for more location-based articles, investor focused content, and listings from our clients.

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Market Updates 未分類

3 QUESTIONS Every Property Entrepreneur Needs to Ask Themselves

In our second episode with Edwin Lee, he shares the key elements of business that allowed him to succeed.

In our second episode with Edwin Lee, we continue the conversation about his business journey with self-built Bridgeway Fund. He’s built up Hong Kong’s first SFC retailer fund from scratch, and this is the second part of his story.

Throughout any business journey, everyone must be ready to encounter strong competition and criticism. In describing his experience building up a shop fund, Edwin Lee shares his own fair share of struggle, and how he rose above. In order to become the best in his niche and reach nearly 50% market share of turnover rate, he focused on answering three key guiding questions.

-Does the market have demand?

Regardless of how strong a business idea there is, it must be applicable in the local market.

In the case of Edwin Lee, he recognized that small shops were very popular in Hong Kong, and people were interested to become involved in their transactions. Business leaders must consider how the market would react to their solutions, and how potential clients will differ in opinion.

-Who are your competitors and what are their strengths?

Understanding your competition is a crucial element of understanding your own company.

In the case of Bridgeway, Edwin has gone against strong international competition. Famous “Shop Kings” have carved out portions of the Hong Kong market share, yet he still boasts a strong market capitalization. How has he done so? By becoming the best in his niche.

-Do you have what it takes in your niche?

The most adaptable, not the strongest, survive.

Hong Kong is home to strong players, as mentioned above, and Edwin recognized this early. In the first few months, he established what types of retailers and price ranges he would operate in, establishing his territory that he would become the best in. By not focusing on everything at once, he could devote his full attention and make sure he dominated in the niche he created for himself.

With all this said, a successful venture is much more than a clear business plan. Edwin strongly supports the idea that investing in oneself through education truly creates a good leader. Being considerate of alternate options and being well-read has enabled him to prosper in both business and private life. While there is no one-size-fits-all formula for success in the real estate industry, these questions and Edwin’s insights create a necessary foundation.

Watch the above discussion for these useful insights, and stay tuned for our third episode with Edwin Lee. Enjoy!

▶ About the guest:

Edwin is the Founder of Bridgeway Prime Shop Fund Management Ltd, the first SFC (Securities Future Commission) licensed fund management that focuses exclusively on shop properties investment in Hong Kong and major cities worldwide.

Edwin established Bridgeway (Originally HKBI) in 2001 after being an investment banker at Credit Suisse First Boston in New York and Hong Kong. Over the past decade, Bridgeway has grown from a one-man company to become the leading business startup consulting company adopting the Business Build-Operate-Transfer (BOT) model with 300 staff in Hong Kong. As of June 30, 2013, Bridgeway has completed 1,11 business sales transactions and built 78 businesses for entrepreneurs to purchase as ready-made-businesses. Bridegeway now focuses exclusively on property fund management, an SFC regulated type 4 and 9 activities in Hong Kong.

Edwin was the sole awardee of the 2010 Hong Kong Business Awards: Young Entrepreneur Award by DHL/South China Morning Post. He was also named the Innovative Entrepreneur of the Year 2007 by the City Junior Chamber of Hong Kong and Entrepreneur of the Year 2012 by Capital Magazine.

Edwin was the youngest and first non-American Chairman (2009) in the 29-year history of the International Business Brokers Association (IBBA), the world’s largest association for business brokers based in Chicago, USA. Edwin is currently a Board Member of Cyberport Hong Kong. He is a U.S. CPA and a Chartered Financial Analyst (CFA). Edwin received his B.S. Finance and M.S. Accounting from University of Southern California, USA. He has completed his Doctor of Business Administration (DBA) degree at the HK PolyU with a research focus in entrepreneurial motivation and decision making. Edwin has also completed the 3-year Owner President/ Management Program at Harvard Business School.

Edwin is one of the awardees of the 2011 Ten Outstanding Young Persons Selection organized by Junior Chamber International.

▶ Contact Edwin & his team Here:

Website: https://www.bwfund.com/

Facebook: https://www.facebook.com/BridgewayPrimeShopFund                                     

LinkedIn: https://bit.ly/3z7gX1j

▶ Disclaimer:

This disclaimer informs readers/audience that the views, thoughts, and opinions expressed in the text/video belong solely to the author & participant, and not necessarily to the participant’s employer, organization, committee or other group or individual. As it can be difficult to catch some minor errors, transcripts may contain a few typos or inaccuracies.

Please note the following legal conditions:

Denzity owns the copyright in and to all content in and transcripts of Denzity’s video programs and publications (collectively referred to as “Denzity Materials”, with all rights reserved and its right of publicity.

You are welcome to share the below transcript (up to 500 words but not more) in media articles (e.g., The South China Morning Post, Bloomberg, New York Times), on your website, in a non-commercial article or blog post (e.g., Medium and WordPress), and/or on a personal social media account for non-commercial purposes, provided that you include attribution to “Denzity” and link back to the denzity.io/blog URL. For the sake of clarity, media outlets with advertising models are permitted to use excerpts from the transcript per the above. Paragraph

No one is authorized to copy any portion of the Denzity Materials or use Denzity’s name, image or likeness for any commercial purpose or use, including without limitation inclusion in any books, e-books, book summaries or synopses, or on a commercial website or social media site (e.g., Facebook, Twitter, Instagram, etc.) that offers or promotes your or another’s products or services.


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Market Updates 未分類

ESG in Real Estate: Why it Matters

ESG is increasingly a necessity to any property stakeholder. What exactly is it, and how is it shaping the real estate industry as we know it?

In today’s episode, I sit down with Patty Ng and Rosaline Fu to talk about ESG in real estate. Patty and Rosaline are both professionals experienced in the application of ESG in the property sector, and they will share their insights as industry insiders, including experiences with big clients, and their outlook on what is to come.

What it means to be ESG is a large and complex discussion. In the case of real estate, that’s good news. The more elements of sustainability there are, the more pathways for ESG friendly solutions and applications.

At this moment, the E, or environment, of ESG, is the most emphasized, however, the social and governmental factors are still very important. Real estate companies are increasingly becoming aware that there are more ways to measure success than the finances, and incorporating all elements of the ESG initiatives equally are the best way.

With that said, there is a lot of work to be done in both public and private sectors to incentivize sustainable initiatives. While green buildings are already giving better yields and premiums, government and business group benefits to ESG focused firms would simultaneously drive growth and create a better world.

Stay tuned for our second episode of ESG, where we sit down with two local PropTech leaders, who discuss the implications for ESG in the startup world, and how it is remolding the real estate industry.

▶ About the guests:

Patty is the project lead of the sustainability division at Sedgwick Richardson, a design and sustainability consultancy with a strategic focus on the Asia Pacific region. With over eight years of project management experience, she dedicates her time to contract structuring, scheduling, planning, and management of numerous stakeholders to deliver a seamless project experience for her clients. 

Rosaline is a strategic consulting manager at Colliers, where with a sustainable approach she conducts market research and advisory projects related to retail study, residential development, data centre development, Tso Tong Land and brownfield matters, industrial development and more

▶ Contact the Guests here:

-Rosaline Fu

LinkedIn: https://www.linkedin.com/in/rosaline-fu-877952ab/

Website: https://www.colliers.com/zh-hk/news/success-story-rosaline-fu                            

-Patty Ng:

LinkedIn: https://www.linkedin.com/in/pattyng/

▶ Disclaimer:

This disclaimer informs readers/audience that the views, thoughts, and opinions expressed in the text/video belong solely to the author & participant, and not necessarily to the participant’s employer, organization, committee or other group or individual. As it can be difficult to catch some minor errors, transcripts may contain a few typos or inaccuracies.

Please note the following legal conditions:

Denzity owns the copyright in and to all content in and transcripts of Denzity’s video programs and publications (collectively referred to as “Denzity Materials”, with all rights reserved and its right of publicity.

You are welcome to share the below transcript (up to 500 words but not more) in media articles (e.g., The South China Morning Post, Bloomberg, New York Times), on your website, in a non-commercial article or blog post (e.g., Medium and WordPress), and/or on a personal social media account for non-commercial purposes, provided that you include attribution to “Denzity” and link back to the denzity.io/blog URL. For the sake of clarity, media outlets with advertising models are permitted to use excerpts from the transcript per the above.

No one is authorized to copy any portion of the Denzity Materials or use Denzity’s name, image or likeness for any commercial purpose or use, including without limitation inclusion in any books, e-books, book summaries or synopses, or on a commercial website or social media site (e.g., Facebook, Twitter, Instagram, etc.) that offers or promotes your or another’s products or services.

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Market Updates 未分類

Three Ways Millennials are Shaping Real Estate Investment

Consumer habits backed by spending power drives change. For that reason, the motivations and spending practices of millennials have increasingly become part of any market outlook or forecast. From their dining habits to where they prefer to live & work, the demands of this wealth-accumulating consumer class have radically shaped industries. From this demographic trend, current and future property markets are undergoing radical change.

Who exactly are the millennials, and what sets them apart? Born between the 80’s and 90’s, they represent the largest cohort of a generation. They have grown up during a period of globalisation, rapid digitisation, and economic integration. As such, they value immediacy and functional digital spaces. As far as investment is concerned, they are waiting longer than previous generations to purchase a house and get married.

How do they interact with the property industry? The average millennial’s tech-savviness and international-facing mindset make them more willing to adopt/utilise online aggregators, accelerated overseas investment, and the Environmental, Social, and Governance (ESG) standard.

Online aggregators

Millennials, now between their late 30’s and mid 20’s, fuel the demand and success of online solutions. More so, their connection to a massive online community with free-flowing information, and their exposure to different lifestyles and solutions have made them more demanding, exploratory, and impatient.

Aggregators are increasingly crucial in property search and purchase, as per this insight from an online buying trends article found here.

Most millennials are comfortable taking investment advice from the Internet. Whether it’s market research or actual house hunting, the use of online aggregators has become a crucial element of millennial investing. If a brand lacks a digital presence, it is unlikely that it will win out against a competitor with a strong online portal and lead generation.

As investors increasingly depend on online sources, companies should realize the necessity of building their brand online, lest they lose their existing competitive edge.

Overseas Investment

In Hong Kong, homeowners represent a shrinking minority of the population. Even in 2017, only 49.2% of Hong Kong households owned the property they lived in. Comparatively, Singapore’s successful government housing initiatives have brought homeownership above 90%. Understandably, young and mid-career professionals view the local market with unease. In addition, moving out of the family home is not seen as a barrier to adulthood, rather, something more considered before marriage and settling down seriously with a partner.

Yet, purchasing property for investment has never been more popular. News from friends and relatives from overseas who have experienced comparatively dirt-cheap prices have pushed more people to look abroad. For example, HK $1.8 million can fetch a 600-sq ft, two-bedroom flat in downtown Brisbane, which can quickly be leased out to a high-demand market. Meanwhile, a similar 604 -sq ft flat in eastern Hong Kong at the Kornhill Development sold for a whopping HK$10.3 million in early 2020.

Hong Kong’s dense real estate market is pushing residents to search abroad for their next property investment.

Combine this with the strong performance of the Hong Kong dollar during the pandemic, and it is no surprise that Hong Kongers, millennials, and otherwise, are looking abroad for property investment. Since the pandemic, Jonathan Benarr, director of APAC at international property portal Quintessentially Estates, and his colleagues have seen an “over 300 percent increase in client requests for buy-side support,” with main cities of interest being “Sydney, London, and Lisbon.”

ESG – Environmental, Social, and Governmental

On top of online aggregators and overseas investment, millennials are making investments more green. In a report on the impact of social good on real estate, Deloitte describes millennial investors as individuals who make sure their properties are “aligned with their intended positive social impact.”

Millennials are reshaping property investment through focus on ESG.

Investors of this generational cohort are formally educated and have a personal stake in social, environmental, and governmental concerns. Asset prices reflect this as “greener” projects promise a higher yield and premium. This is encouraging for asset managers, as new practices in development have enabled green buildings to see a 30%-80% reduction in utility costs.

All in all, Millennials are reshaping real estate, and companies must adopt new ways of doing business to cater to their needs. These changes are here to stay, and the application of digital technologies are quickly replacing traditional methods.

Are we right in emphasizing the growing reliance on online aggregators, overseas property, and ESG components? Let us know in the comments below Real estate companies in all molds best stay in tune with events and trends of the millennial investor. Are we right in emphasizing the growing reliance on online aggregators, overseas property, and ESG components? Let us know in the comments below!