Introducing London’s high-end One Nine Elms
THE London property market has been under scrutiny since before the UK’s vote to leave the European Union (Brexit). The shock and jitters in the property market have subsided somewhat, and the falling pound sterling means better deals for foreign investors.
So, that might make it the right time to introduce One Nine Elms in London, by Dalian Wanda Group — the world’s largest property company — to the Malaysian market.
One Nine Elms is one of the China-based group’s first international projects outside mainland China, according to Tim Gawthorn, Wanda One (UK) Ltd sales and marketing director,
“We (Wanda One) are a direct subsidiary and are spearheading the development, which is a five-star hotel and luxury residences in the Nine Elms regeneration area in Central London,” Gawthorn tells City & Country. He was recently in town for a by-invitation only preview of the property.
Nine Elms, the largest regeneration project in Europe, is where Battersea Power Station — a project familiar to most Malaysians — is located.
“Historically, it’s a 3km stretch along the River Thames that has been massively underused, especially given its central location. There are many other developers breathing new life into the area by bringing new arts and cultural facilities, new residences and high street retail to really bring the area up to the standing it should be,” says Gawthorn.
One Nine Elms comprises the 58-storey City Tower and 43-storey River Tower. Wanda One started selling the development in October 2014 and has achieved a take-up rate of 50%.
“There are 334 units in the City Tower and 103 units in River Tower. The main difference between the two is the hotel, which is located in the River Tower. The hotel will occupy the ground to the 18th floor, while the residences will be from the 19th to the 41st floor, hence the smaller number of apartments,” says Gawthorn.
He notes that City Tower is a standalone development with a full set of its own facilities, including a fully equipped gym, children’s play area, KTV room, cinema screening room, residents lounge and sky terrace, among others.
“The residences in the River Tower are not managed by the hotel but they will benefit from the services of the hotel. The residents have direct access to the hotel’s gym and swimming pool and can have room service delivered to their units as well as use the turndown service, the concierge and butler services,” says Gawthorn.
Dalian Wanda owns 84 five-star hotels with total of 26,073 rooms and operates the premier five-star Wanda Reign, the luxury five-star Wanda Vista, the five-star Wanda Realm and the four-star Wanda Jin.
“Being a hotelier, we will maintain and retain the management of the hotel (Wanda Vista) and development as a whole. This is a unique selling point for us,” says Gawthorn.
The development offers one to three-bedroom units, ranging from 667 to 1,748 sq ft in size and priced from £1,750 to £2,200 psf.
Still an attractive market
Even though the fundamentals of the UK and London property markets have changed since Brexit, the issue of supply and demand remains, says Gawthorn.
“We need, on average, about 50,000 new homes to be built per year. Last year, we only managed to hit just over 15,000 new homes. If we continue to see this shortfall, the demand and supply issue is not going to go away anytime soon. Nine Elms regeneration as a whole is going to deliver 18,000 to 20,000 new homes, which is still fall short of the targeted new homes per annum,” says Gawthorn.
He believes the constants, such as London’s standing in terms of global education, are still an enormous pull for investors, particularly those who have children coming to study in the UK.
“Central London or London as whole, the bricks-and-mortar investments as we call it, has a cyclical market but the appreciation over the last 10 years has been 84.1% as per the land registry, which is our official benchmark registry in the UK. This has outperformed even gold over the last 10 years. So, as a long-term asset, London is definitely still very attractive.
“This is a higher-end development. If you look at the super prime central zone like Knightsbridge and Mayfair, you are looking at prices of £3,000 to £5,500 psf. We are between £1,750 and £2,200 psf, so we are at the higher end of central London development. The riverside location is still one of the main attractions for investors in the capital, says Gawthorn.
Although One Nine Elms is a Chinese development, Gawthorn assures that it is built for the local market.
“Our primary focus is always the UK market but we know London is driven quite a lot by the international market. So the primary focus is the UK but there are always opportunities and appetite globally for London properties. One Nine Elms was marketed in the Middle East early this year. The Middle East and Asian markets are really familiar with the concept of our product (and its hotel residential services).
“We are probably seeing about 35% of our buyers coming from London and Europe and we are fairly evenly split between the Middle East, Southeast Asia and China markets. We will probably have more local buyers as we get close to completion, which will be around the end of 2019 or beginning of 2020,” says Gawthorn.
For One Nine Elms, he expects to see about 12% capital appreciation. In fact, prices have appreciated by 14% since selling started in October 2014, he says.
“We have seen steady growth within the market but it has to be steady growth and sustainable. We, as an industry, need to make sure we don’t fall into the pitfalls of 2007 and 2008, when appreciation was very strong, probably a little bit too strong to be sustainable. So, finding that nice level across the market is key to be sustainable,” he concludes.
This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Jan 2, 2016. Subscribe here for your personal copy.