International property fund manager Cordea Savills has launched the Prime London Residential Development Fund to give Asian investors an alternative means of investing in London’s residential market.
With a weakening pound and low inflation, more Asian investors, particularly from China, Hong Kong and Singapore, are seeing opportunities in the UK and London. The Cordea Savills fund will invest in the luxury sector and enables investors to enter the development process earlier, as well as use this leverage to provide access to development-style returns.
“The potential of Cordea Savills to capitalise on this lack of financing in prime London development is enhanced by our parent company’s dominance in this sector. Savills has dedicated teams of prime London planning consultants and development managers as well as world class research. It would be hard to imagine an institution with access to better quality information on this space,” said Brian D’Arcy Clark, Head of Residential Acquisitions.
Cordea Savills said the fund will focus on the development of apartments in areas such as Belgravia, Knightsbridge and Mayfair. Demand in these areas is fuelled by the global “new rich” who are drawn to London’s stability, multicultural society, amenable residency regulations and educational establishments.
It added that the target fund size is £150 million (S$303.5 million), with the first closing scheduled for January 2012. Cordea Savills expects to see net returns of between 18 and 20 percent a year and investors who are keen on the fund will need to contribute a minimum of £200,000 (S$403,400).
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