Co-Investing and Development Opportunities in London’s Property Market
 
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Co-Investing and Development Opportunities in London’s Property Market

18 Apr 2016

Santhosh Gowda, Founder and Chairman of UK-based property company Strawberry Star Group, has over 25 years of experience in global realty markets in Singapore, India and the UAE prior to establishing Strawberry Star in London in 2007 and turning it into a prominent player in the London property market within a short eight years.

From managing investments of more than 700 luxury apartments in London to developing top-notch landmark development and projects, to date, Strawberry Star has grown in strength in London, Singapore, New Delhi and Dubai. Its aggregate investments totalled over £500 million (S$964 million) and it has more than 1,000 units and enterprising development projects in the pipeline.

Foreseeing burgeoning local interest in the London property market, Strawberry Star set up an office in Singapore last year to provide sales, lettings and management services to Singapore investors who need proper guidance and services such as analysing London market trends and market conditions, equipping investors with market intelligence for savvy business decisions.

Strawberry Star has also stepped up efforts to secure investments from Singapore and Hong Kong in residential and commercial properties as well as development of projects.

With the Group’s experience, capability and resources, investors’ long-term plans in the London property market are ably facilitated in five key areas – Capital, Development, Acquisitions, Sales and Lettings & Management.

“Our primary objective of opening office in Hong Kong and Singapore is to give services to people who have invested in London and also raise more equities for the development in London. That is the primary focus,” says Mr Gowda.


Santhosh Gowda
Founder and Chairman of UK-based property company, Strawberry Star Group.

Doris Tan
Regional Director (Singapore & Hong Kong) of Strawberry Star Group.

Another Star Onboard

“A lot of smaller developers are very keen to enter into London’s development, but they don’t know how to get started. We can help them raise capital, jointly develop the projects, and then sell downstream as well as provide after-sales service,” says Doris Tan, Regional Director (Singapore & Hong Kong) of Strawberry Star.

Tan joined the Group in early 2016. Prior to joining Strawberry Star, Tan has more than 30 years of experience in the international property arena. She was Head of International Residential Property Services at Jones Lang Lasalle Property Consultants in Singapore. She founded her own firm DST International in 1998, and managed it for 13 years before acquisition by Jones Lang Lasalle in 2011.

Her banking background – 18 years spent working with Lloyds Bank/Hill Samuel in Singapore as a Director – makes it easier for her to raise funds for Strawberry Star.

“It is a very good combination for me to come on board Strawberry Star. It is a combination of banking, property and development,” says Tan. Mr Gowda adds, “Doris Tan has joined us for three months. She has credibility in the market and she knows everyone.”

Singaporeans’ Interest in London Properties

Singapore’s lacklustre property market fuelled by stricter regulations such as Additional Buyer’s Stamp Duty (ABSD) of 15 per cent has posed much difficulty for Singaporeans to invest locally. Singaporeans are thus looking for opportunities overseas, and London is a safer choice for overseas investors.

“Due to cooling measures in Singapore, a lot of people feel opportunities are lesser, and they are looking for opportunities outside. They are tapping on London, Australia,” says Mr Gowda.

Doris agrees in unison: “There are many things that the developers cannot do in Singapore now, due to measures such as Total Debt Servicing Ratio (TDSR) and ABSD.”

Coupled with an excellent education system, familiarity between Singapore and London, and the growing demand for London’s housing, there has been a surge in demand that has buoyed rental markets.

According to statistics provided by CBRE, Chinese, Singaporean, Malaysian and Qatari developers have piled into London’s property market, controlling land with planning consent for over 33,000 residential units. They have purchased iconic sites across London such as Battersea Power Station, and strategic sites such as Earls Court, Greenwich Peninsula and Royal Wharf.

Opportunities

According to Mr Gowda, cooling measures in the UK such as imposing an additional stamp duty levy of three per cent on all second home and buy-to-let purchases does “choke off” some investors in the rental market, but the taxation is still much lesser in London than in Singapore.

“When the investor buys in the right location, where there is infrastructure and connectivity, the capital growth in the next five years will definitely offset this additional stamp duty,” he affirms.

Mr Gowda says connectivity and transport is a crucial point to consider when investing in London property, be it for renting or selling.

On top of that, owing to a strong demand for property due to a lack of housing in London, the opportunities for investors are still abundant.

More than 800,000 new homes need to be built in London by 2021 to keep up with housing demand, according to London Councils' research.

“The demand is going to increase for the next 10 years,” says Mr Gowda.

For the next five years, Strawberry Star is looking into cooperating with London Councils to build more housing in London’s communities, predominately in Zone 3 and 4 where the Group is exploring to build 150 to 250 units.

“For joint venture with the councils, we don’t have to pay for the land upfront,” Mr Gowda emphasises.

Strawberry Star has formed a strong acquisition team that identifies opportunities, a strong sales and marketing team, as well as a capable developing team over the last ten years. Mr Gowda is confident the Group can deliver projects as a credible developer.

“We are looking for co-investors. Strawberry Star is also welcoming joint venture with developers. We are now reaching to people in Asia, Middle East and India to join hands with us,” he says.

The minimum investment by investors for the Group’s projects is £5 million (S$9.6 million) to £10 million (S$19.3 million). “We are looking at the profile of the investors. Even when they are small developers, they must have the experience. If they are passive investors and do not have the experience, they can provide funding and receive the return,” says Tan.

Projects

Chelsea Bridge Wharf built by Berkeley Homes was Strawberry Star’s first project investment, which amounted to £18 million in 2009.

In 2012, Strawberry Star ventured into London’s most happening regeneration region – Nine Elms and Docklands – with its 204-unit Sky Gardens development with Fraser Property UK. Alongside this, another iconic project is the 360-unit Hoola, in partnership with developer Hub. Hoola is the Group’s biggest investment to date in the Royal Docks. Both projects are scheduled for completion by the end of this year.


Hoola is another iconic project of Strawberry Star. In partnership with developer Hub, Hoola is the Group’s biggest investment to date in the Royal Docks, scheduled for completion by the end of this year.

In 2012, Strawberry Star ventured into London’s most happening regeneration region – Nine Elms and Docklands – with its 204-unit Sky Gardens development with Fraser Property UK.

Besides that, Strawberry also introduced their maiden project from Berlin, the 127-unit Carré Voltaire, on April 14 and will continue to bring in more exciting projects.

“With my connections to tap on, I will bring in more projects to Singapore from other parts of the world,” says Tan.

 


Article written by Epouch Times