Big spenders splash out: Far Eastern professionals have money to invest in London, says Anne Spackman

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The Independent Online
A Singapore doctor and his wife came on a shopping trip to London recently. They were looking for some property. They sat down in Savills' Knightsbridge office with a folder 3in thick of flats and houses that they had selected to view. They had pounds 7m to spend.

Though the sum was exceptional, the circumstances were not. While a British doctor or civil servant or any other professional might spend his or her weekends cutting the lawn or playing golf, a doctor in Hong Kong or Singapore is likely to be studying investment magazines. For them, owning a property company is as normal a sideline as owning a second car.

There are many reasons why so many non-property professionals are buying here. Many have a lot of cash, but not enough for a property in Hong Kong, so they buy abroad and rent at home. They see London as a safe haven for their money and a good investment. Many have children at school or university here or were themselves educated in England.

For the past 12 months, everyone has been waiting for this huge source to dry up. But they keep on coming. Singapore is now as active a market as Hong Kong, with Malaysia and Thailand coming up behind. Even buyers from Taiwan, Indonesia and Vietnam are apearing in the London market.

In the case of the Singapore doctor, his company was worth pounds 480m and he employed 30 staff. Most potential buyers flocking to property exhibitions hosted by British estate agents in Hong Kong are working on a smaller scale. But their list of requirements is similar. Ideally they want new central London property, freehold or on a long lease and with car parking, which can be rented out easily. The place must also be approved by the feng shui man, who vets its philosophical suitability and is as important a professional as the


These buyers have been such a driving force behind the central London market's recovery over the past two years that developers are bending over backwards to meet their needs. Estate agents have also had to learn fast about the kind of deal expected.

Last week Savills launched a new building in Gloucester Street, Pimlico, which is tailored to the foreign investment buyer. The block is completely new, having been built on a bomb site, but its facade matches the others in this conservation area.

It has high security, underground car parking, traditional features such as sash windows and cornices, plus power showers and quality kitchen fittings. 'If you are renting a place out, everything has to work,' said Peregrine Lloyd of the project managers Haldon Trust. 'Miele is 25 per cent more expensive, but efficiency is crucial in the rental market.'

There is a downside to providing this level of facility at a price the market will stand and it is the room sizes, which are very small. The same is true of Observatory Gardens in Kensington, but it has not stopped the flats selling fast in Hong Kong. A two-bedroom, two-bathroom flat on the first floor of Gloucester Street will cost about pounds 245,000.

One reason why space is of lesser importance is that people are buying serviced living quarters rather than homes. The typical occupant wants to drive into the garage, waving the security smart card, leave 'kit' such as suitcases or skis in a store cupboard, take a lift, which works, to the flat, put a meal from the freezer into the microwave, have a power shower and go to bed. Forget character and space.

One of the seven blocks of flats in Gloucester Street was sold, sight unseen, to a Singapore buyer last January for about pounds 2.5m. Savills took the next phase of the development to Hong Kong and sold it easily. More than 40 per cent of the flats have been bought by Far Eastern buyers. What they want is a total investment package, giving the cost of the flat, how it will be furnished and rental return. Many will never see the property, never mind live in it. The emergence in 1992 of the Far East buyer coincided with a dearth of available property, as most developers were too recession-hit to build. Since then they have been prominent in all sales of new flats in central London and Docklands, where prices seem phenomenally low to them. A Dockland development of 53 flats in the Isle of Dogs was sold off-plan - before it was built - in Hong Kong last week.

Most properties being bought are rented out. Some, such as Highgate's Cholmondley Grange development, were sold off-plan to a Hong Kong consortium. When the homes are finished, it will sell them on. The profit comes from any price rises, plus the discount won for buying en bloc.

How long can it last? Dominic Grace, who runs Savills' Knightsbridge office, says interest from the Far East is still enormous. Many estate agents, such as Strutt and Parker, have a full-time office in Hong Kong. Others, like Savills, use associates.

But the property sought is of a specific nature and must be in the right place. A Highgate agent put a leaflet through my Muswell Hill door saying a Hong Kong consortium was keen to buy in north London. 'Should you be contemplating a move you may wish to take advantage of this opportunity,' it said.

When I rang the agent it said Hong Kong buyers were really only interested in St John's Wood and Hampstead, with Highgate an outside possibility. Why send me the letter? Because it is desperate to get new instructions, and a potential Hong Kong buyer is a tempting lure.

(Photograph omitted)