Cordea Savills, the fund management arm of British real estate consultancy Savills PLC, has launched a 150 million pound fund that will buy prime London homes, giving Asian investors an alternative way to invest in the sector.
Interest in London residential property has been on the rise in recent months among investors from China, Hong Kong and Singapore, spurred in part by state-led measures to cool real estate markets in Asia.
At the upmarket One Hyde Park development, for instance, Asian investors accounted for 30 percent of buyers.
Cordea Savills' new fund is expected to benefit from the strong Asian interest in London, and indications of interest have been strong so far, said Brian D'Arcy Clark, head of its residential acquisitions, especially on the back of strong demand from Chinese buyers.
There's very good evidence that Chinese investors want to invest in London and there's pent-up demand from high-net-worth individuals from China to come into London, Clark said.
Cordea Savills expects its fund to see net returns of about 18-20 percent a year, and said investors who are keen on the fund will need to put in a minimum of 200,000 pounds.
The fund, which closes in January, will invest in London property by forming joint ventures with developers and by committing to acquire apartment units before construction to get better prices, Cordea Savills said.
Investing in the fund would allow investors greater diversification and higher potential returns as the fund would be able to acquire assets in bulk and thus at better discounts, Clark said.
($1 = 0.6458 British pounds)
(Reporting by Charmian Kok; Editing by Kevin Lim)