Land Securities sells a piece of Victoria to Singaporeans

January 7, 2015 3:09 PM SGT

SINGAPORE: On Nov 18, Land Securities held a private cocktail reception for its Singapore clients at the Fullerton Bay Hotel.

It launched its four penthouses at the luxury 100-unit residential block Kings Gate in London.

The penthouses measure 3,337 to 3,595 sq ft, and are priced around £10 million ($20.6 million), or an average price of £2,800 to £2,900 psf.

Tom Eshelby, residential director of Land Securities, has been coming to Singapore at least twice a year since 2010.

Land Securities, considered UK’s largest commercial property developer by market capitalisation, entered the luxury residential market that year, and Eshelby was brought onboard to head that business.

Eshelby was previously with Macquarie Bank and Savills.

Land Securities is undertaking a £2.2 billion regeneration scheme with three million sq ft under development in Victoria, which is famous for its eponymous central London railway station.

“Victoria is changing fast, and we’re now on our third residential scheme,” says Eshelby.

In 2010, the London residential market was showing signs of recovering after the global financial crisis in 2008/09.

Land Securities was able to “catch that wave”, says Eshelby.

When the property developer launched its maiden luxury residential development, a 59-unit apartment block called Wellington House, it sold 18 units in Singapore in October 2010.

“Those who bought have all done well financially,” says Eshelby.

The value of the properties has appreciated some 20% and the project was completed last year.

On the back of the success of Wellington House, Eshelby returned to Singapore in January 2012 with the 100-unit Kings Gate.

This time, Singaporeans bought 25 units.

Kings Gate is already 85% sold, and most of the units sold are primarily studios, and one- and two-bedroom apartments.

While many buyers were investors, quite a number had also purchased for their own use, says Eshelby.

The 14-storey residential block is expected to be completed in July 2015.

He sees strong demand from both investors and end-users, as Kings Gate is located just a three-minute walk from the Victoria station, considered the largest in London.

Last year, Land Securities also launched a third residential project called Nova.

It was showcased in Singapore and Hong Kong, like its earlier developments.

The 175-unit Nova is also 80% sold.

Having been to Singapore on a regular basis over the past four years, Eshelby noticed there has been a slowdown in sales at property exhibitions this year.

“I don’t think there are fewer apartments being sold,” he says.

“What I think is that there are more projects coming over.” He recalls that, in 2010, there was only one major property exhibition every weekend in Singapore.

Today, there are at least four to six overseas property exhibitions every weekend.

“Overall, more flats may have been sold, but each project has had a smaller share of that.” Even in the UK, house price growth eased for the fourth straight month in November amid softening demand, according to Halifax.

Sentiment has now been dampened, with the UK chancellor of the exchequer George Osborne’s introduction of a revised tiered stamp duty system for housing that took effect on Dec 4.

Properties priced up to £1.5 million will be subject to a tax of 10%; for those priced above £1.5 million, the tax will be 12%.

“Nowhere will this hit harder than in Prime Central London and Southeast London, where the majority of [such] transactions occur,” comments Alex Newell, managing director of Hanover Private Office.

However, the transformation of Victoria, which began in 2006, is well underway.

Luxury fashion brands and groups have also moved their headquarters into some of the new and transformed office buildings in Victoria, including Jimmy Choo’s, Tom Ford, Burberry, Kering (formerly PPR), LVMH and Richemont.

The neighbourhood has also become a magnet for global blue-chip companies, notably Intuit, Microsoft and Jupiter Asset Management.

Retail space has also been well taken, with Jamie Oliver opening an 8,000 sq ft restaurant at Kings Gate and restaurant Iberica occupying a 5,000 sq ft unit on the ground floor of Zig Zag Building.

Victoria may have once been a forgotten neighbourhood, with mainly 1960s office buildings for trade and industry, but such “dull properties” are disappearing, says Eshelby.

With an SW1 post code, it is in the vicinity of Westminster, as well as the most expensive neighbourhoods in London: Belgravia, Chelsea and Mayfair.

It is also near St James’ Park.

In regenerating the area, Land Securities is also keen on changing its perception.

“It’s not just a great place to work, but also a desirable neighbourhood to live in,” says Eshelby.

This article appeared in the City & Country of Issue 655 (Dec 8) of The Edge Singapore.

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