London super-prime property records higher sales despite pandemic

by S BIRRUNTHA / pic by BLOOMBERG

MORE money has been spent on London properties valued over £10 million (RM53.81 million) in the first eight months of this year, compared to the same period last year despite the Covid-19 pandemic.

According to Knight Frank’s Super-Prime Market Insight — Autumn 2020 report, £1.13 billion was spent on London super-prime property from January to August 2020, which was 16% higher than the figure of £977.5 million recorded for the same period last year.

The report also revealed that there were a total of 56 super-prime deals in the first eight months of this year, compared to 57 last year.

“A higher proportion of super-prime exchanges involved British buyers in 2020 given the restrictions on travel.

“In the first eight months of the year, the proportion was 40%, the highest such figure over the last decade,” it added.

Among the 56 deals, the report revealed that Kensington accounted for 14.3%, the highest proportion among any London areas. In the same period of 2019, Mayfair had the highest proportion at 24.6%.

Knight Frank Malaysia associate director for international residential project marketing Dominic Heaton-Watson said the increase in London’s super-prime residential market corresponds with the higher levels of enquiries seen from its Malaysia-based clients.

He added that London remained as the top overseas property investment destination for Malaysia, despite concerns over Covid-19, due to its broad-based economy, transparent legal system, culture and heritage and world-class education facilities.

“I have seen Malaysia-based clients become even more focused on their future London property requirements with lockdown, perhaps allowing time to re-evaluate and fine-tune their exact criteria,” he said in the report.

Heaton-Watson also noted that the Royal Borough of Kensington and Chelsea has long been a favourite locality for its Malaysia-based clients.

He said it offered a wonderful blend of key characteristics, namely a prime central location, surrounded by green open spaces, some of the finest restaurants and shops, where Harrods is an all-time favourite, as well as proximity to the best higher education institutions.

“All this was offered at a discount in pricing on a per sq ft basis compared to its immediate neighbour Mayfair. In today’s climate, this value proposition appeals to savvy Malaysia-based investors,” he added.

Meanwhile, the report also saw an increased demand for outdoor spaces due to the higher transactions in the family house market, especially in areas such as Notting Hill, St John’s Wood, Hampstead and Belgravia.

Houses accounted for 66% of sales of over £10 million between January and August 2020.

Knight Frank global head of prime sales Paddy Dring said key motivators of capital preservation, the UK education system and cheap debt are unchanged.

“The trend for more outdoor spaces has benefitted suburban and country markets, but buyers are retaining their London investment for the long term. Prices are robust with single-digit percentage discounts but no more,” he added.

However, with the recent spike in Covid-19 cases in the UK, Knight Frank head of UK residential research Tom Bill believes that the final quarter of the year will be marked by uncertainty as the UK government seeks to contain the pandemic.

“Brexit and the US election will have an impact on currency movements, but relaxation of travel restrictions will be the key factor affecting transaction volumes,” he noted.