SINGAPORE (EDGEPROP) - With Singapore having reopened its travel borders and eased Covid-19 restrictions, Manchester-based UK property developer Salboy reckons it is now an opportune time to launch two of its UK projects over two consecutive weekends in May. It is kicking off with its landmark Viadux in Central Manchester over the weekend of May 14-15; followed by luxury boutique development One Cluny Mews at Earl’s Court in prime Central London on the weekend of May 21-22.
Salboy chose Singapore for its first stop in Asia as the level of investor interest in overseas property, particularly UK projects, has “easily doubled compared to 2021”, says Chua Shir Yee, JLL head of international residential sales.
Previously when safe management measures were in place, these physical events drew about 10 different groups of visitors per weekend, estimates Chua. Today, with restrictions lifted, the number of attendees at such physical events has more than doubled to “20 to 30 groups”, she adds. “Interest level has definitely picked up tremendously since last year.”
Another reason for the growing interest is the property cooling measures introduced by the Singapore government that included a hike in additional buyer’s stamp duty for property investors and foreign buyers.
However, Salboy had recognised the appetite of Asian investors for UK property early on. It has been launching its projects in Asia since 2017, and established Hong Kong as its Asian headquarters and a launchpad into China. An office was set up in Shanghai in 2019, followed by Beijing in 4Q2021.
The superstructure will rise up from the foundations on reinforced columns standing independently from the Grade II listed Victorian brickworks. Rising above the Manchester Conference Complex service yard and metro line which will both remain active and in-use during construction (Credit: Salboy)
In Southeast Asia, Singapore is a key market for Salboy, according to Carmen Ching, Asia Pacific managing director for the firm. The last time the UK developer was in Singapore was in 2017 and 2018, when it showcased its Manchester projects such as Local Blackfriars, Local Crescent and Burlington Square.
The firm is considering setting up an office in Singapore as a base for Southeast Asia. “We want to have a presence in Singapore in order to be closer to our buyers and business partners here,” says Ching.
Styled as a private equity investment and property development firm, Salboy had its origins as a lender to property developers and contractors in the UK who had difficulty getting bank financing during the Global Financial Crisis in 2008. The firm ventured into property development in 2014, and is owned and managed by Simon Ismail alongside Fred Done, billionaire owner of bookmaking chain Betfred.
Unlike other mainstream developers, Salboy is vertically integrated, says Ching. Its construction arm Domis Construction handles all of Salboy’s projects, and has completed more than 2,400 homes to date. Salboy has a development pipeline of about 1,500 homes worth more than GBP950 million ($1.62 billion).
The historic site was once home to the 1st century Roman settlement. The Grade II listed Victorian arches once served as the train line into Manchester Central Station, and Salboy is converting the space into amenities including a bar, restaurant and residents’ lobby with giant aquarium (Credit: Salboy)
Its most significant development in the immediate term is Viadux, a mixed-use development located in the city centre of Manchester. Slated for completion in 2Q2024, the project has 375 apartments in a 40-storey residential tower and a 240,000 sq ft, Grade-A office tower. The project is designed by internationally renowned architectural firm SimpsonHaugh and Partners, with Domis handling the construction.
Salboy and Ask Real Estate had formed a 50:50 joint venture to develop Viadux in January 2020. Ask Real Estate was to develop the 14-storey commercial complex, while Salboy was to develop the residential tower. However, in 2021, Salboy bought out Ask Real Estate’s stake in the joint venture. Warrington Council has also agreed to provide a financing facility for the project, given its significance in Manchester.
Viadux is built on the site of the former Bauer Millet car showrooms located on Deansgate, which closed in 2014. It sits on top of the Grade II-listed arch at the rear of Manchester Central Convention Centre. Salboy is converting the Victorian arches under the former Manchester Central railway station into luxury facilities for the new residential tower, including bars, restaurants, gym and swimming pool, says Salboy’s Ching.
The residential tower has predominantly one- and two-bedroom apartments. One-bedders of 546 to 563 sq ft have price tags of GBP265,000 to GBP430,000. Meanwhile, two-bedroom apartments of 744 to 817 sq ft are priced from GBP350,000 to GBP625,000.
Artist’s impression of the exterior of One Cluny Mews, a 35-unit, luxury boutique development (Credit: Salboy)
The second project to be rolled out is in London: One Cluny Mews, located within the affluent neighbourhood of Earl’s Court in the Royal Borough of Kensington and Chelsea. In the vicinity are fashionable retail shops, cafés and restaurants. The property is just a five-minute walk to Earl’s Court tube station. The 35 units are a mix of one- to three-bedroom apartments, and are scheduled for completion in April 2023.
Surrounded by Victorian architecture and garden squares, One Cluny Mews is also close to Holland Park and Kensington Gardens. Prices start from GBP950,000 for a one-bedroom apartment.
The idea of launching two different projects over two consecutive weeks was to give investors an option: “One Cluny Mews at Earl’s Court is in the borough of Kensington and Chelsea, a prime residential area where there is very limit- ed new residential stock,” notes Ching.
Viadux, on the other hand, is “a trophy development”, continues Ching. “It is ideal for those who want something unique. The scale of the facilities that we are providing for just 375 units and the attention to detail is unmatched.” Viadux is also located within the inner city conservation area of Manchester, she adds. It is linked to the Deansgate train station, just an eight-minute walk or two-minute drive to Spinningfields CBD.
The balcony of the one-bedroom apartment with a view of the living room and bedroom (Credit: Salboy)
For investors, another lure of UK property is the prospect of a strong rental market in addition to capital growth. According to JLL senior research analyst in the UK, Meg Eglington, London’s residential rental market has bounced back compared to early 2020, at the start of the pandemic. “Looking ahead to the next 12 to 24 months, international renters are likely to be the most influential for market performance,” she adds.
Shortage of supply is further pushing rental values to higher levels than seen pre-pandemic, says Charlotte Russell, JLL area director of residential lettings. In some cases, rental values have gone up by as high as 50%. “We have never seen such a shortage of available rental properties across Central London, which will continue to be an ongoing issue throughout 2022,” she adds. “Void periods are low, and properties are typically let within three to seven days, with increased rents.”
JLL forecasts strong rental growth of 4% across Greater London for the whole of 2022, while prime Central London is projected to see rents rise by 6%. Meanwhile, price growth in prime Central London is projected to be up to 7.5% in 2022, while Greater London is expected to see prices increase by about 6%. This will be driven largely by an anticipated return in travel demand from the world’s high-net-worth individuals, coupled with a severe lack of supply of rental homes, according to JLL.
“Manchester has always been an interesting city for Singaporeans looking for an investment product because of the attractive price point relative to prime Central London,” notes Salboy’s Ching. “And it has a great growth story as a regional city.” Rental growth is projected to be about 5% in the Manchester CBD area, she adds.
JLL is forecasting house prices in Manchester to grow by 6% this year, while rental growth is projected to be about 3.5%.
In addition to a new generation of parents looking to purchase property for their children studying in the UK, JLL’s Chua is also seeing a new group of investors in Singapore — the young and affluent, who have made their wealth in tech and cryptocurrency, and are also eager to invest in real estate. “We see a lot more of these Singaporean investors looking to put their money in real estate overseas,” she adds.