London luxury property is still glitzy for Center E investors

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Source:   —  October 12, 2017, at 12:26 PM

The feeble pound and falling prices are encouraging Center E investors to continue to pour millions into London luxury genuine estate despite concerns about Brexit.

London luxury property is still glitzy for Center E investors

The feeble pound and falling prices are encouraging Center E investors to continue to pour millions into London luxury genuine estate despite concerns about Brexit.

"They like London," said Niccolo Barattieri di San Pietro, CEO of luxury property developer Northacre, which is owned by the Abu Dhabi Financial Group. "They wish to send their kids there, they speak the language, they realize the legal system."

Northacre started selling units at The Broadway in London latest week. The development consists of two hundred eighty-five apartments on the site of the former police headquarters at New Scotland Yard in Westminster. The apartments start at £2 million ($2.6 million).

Barattieri estimates that eighty percent of luxury London homes are bought by foreign investors, and the fall in the pound since the U. K. voted to leave the European Union has helped.

"Particularly right now, where the foreign buyer has an incredible advantage over a U. K. buyer," Barattieri told CNNMoney.

"We're seeing an inflow of dollar-denominated buyers because they look one of those opportunities that comes to London every decade," he added, referring to the market slump that followed the global financial crisis in two thousand-eighth.

The pound has fallen twelve percent against the U. S. dollar since June latest year due to concerns about the impact of Brexit on the U. K. economy.

Related: Toronto faces highest risk of a housing bubble

JLL, a genuine estate and investment firm, says its Gulf clients spent about $600 million on London property in two thousand-sixteenth. It expects that no to rise this year as buyers return after pausing in the immediate aftermath of the Brexit vote.

"There were a lot of people sitting on their hands saying 'well what does this mean?' " said Will McKintosh, who advises JLL clients in the Center E on London residential purchases.

"What we've presently found is people just accepted London is London... We may lose a few thousand jobs in banking but we might gain a few thousand in [the tech industry]," he said.

An artist'south impression of The Broadway at New Scotland Yard in London.

Northacre is developing another project of seventy-two luxury apartments across from Buckingham Palace. More than half of the fifty-two apartments that have already been sold in the development went to foreign buyers, Barattieri said.

Related: Expats really don't wish to live in Brexit Britain

"The investors are really looking at a three to five year view and the feeling that Brexit is a brief duration issue that'll obtain resolved," said JLL'south McKintosh.

Lower prices are certainly helping to hold foreign buyers interested.

London residence prices slipped 0.6 percent in the quarter ended September, according to mortgage provider Nationwide. It was the first city-wide decline in prices since the global financial crisis. (Average prices are still up fifty-six percent from a decade ago.)

Central London genuine estate prices have taken a much bigger hit recently.

Savills, a leading U. K. genuine estate agency, said prices across London'south prime housing markets dropped 1.2 percent in the third quarter of this year. Prices are now eight percent below their two thousand fourteen peak, it added. Prices for properties worth more than £2 million have dropped even more over that period. They're down by 12.5%.

But Savills predicted latest mo that the most desirable London neighborhoods could look prices rise twenty percent by two thousand twenty-two, once the uncertainty of Brexit clears.

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