Thai property investors have been targeting London for some time now, but a strong baht coupled with a weak pound supercharged this demand. Even with uncertainty surrounding the global economy, CBRE believes Thai property investors will remain active in London this year.
The property consultancy has found that London’s Zone 1 and Zone 2 remain the most popular locations for purchases, especially among high net worth individuals in Thailand.
“The London property market is becoming a popular investment choice for Thai top-end property investors,” Pornpimol Phuengkhuankhan, Head of Advisory & Transaction Services – Residential Sales Ad Hoc, CBRE Thailand, explains. “The first group of investors is made up of the upper-class families of Thai students studying in London who aim to provide a home away from home for their children. Ideally, they purchase residential properties that are 500–800 meters from tube stations to provide easy access to their children’s universities. The second group invests in London properties for rental return purpose and capital appreciation.”
However, there has been some interest in London’s Zone 3 where prices are noticeably lower. This isn’t lost on Thai property investors who can receive good value on rental return investments. Since London’s highly developed transport network across the capital makes Zone 3 easily accessible to the city’s central areas, properties here are now drawing interest.
Research from CBRE found that house prices in London will increase by as much as 1.6 percent by the end of 2020 and rise by 3.5 percent in 2021. Over the next five years, home prices are expected to increase 10.5 percent in total.
This is paired with strong London rental growth. Rents have risen by 10 percent during the last five years and could jump by a further 18 percent between now and 2023. Rental prices are being driven upward by unmet demand for house completion. According to the London Annual Plan drafted by The Ministry of Housing, Communities and Local Government, the house completion target of 66,000 units annually has been missed badly.
London developers are aware of the interest from Thai property investors and look for new ways to reach this market. Earlier this year, one of London’s hottest residential developments, White City Living from respected developer Berkeley Group, help an exclusive launch in Bangkok organized in part by Dot Property. The Zone 2 project was popular with local buyers and the two-day event was fully booked.