Gulf home buyers eye Battersea Power Station in London

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• South Bank development attractive to investors
• Neighbourhood offers homes, restaurants, shops and transport links

Gulf investors are snapping up London properties beyond the traditional smart neighbourhoods such as Chelsea and Kensington, north of the river Thames.

With a weak pound offering great purchasing power for Gulf currencies and an upcoming visa liberalisation for GCC countries with Britain, MENA-based property investors are flocking to England’s capital. 

And Arab buyers have been showing considerable interest in the brand new buildings around the upgraded Battersea Power Station development on the south bank of the Thames, which until recently was not on their radar.

• Prime London property one third cheaper for Arab investors

The £9 billion project started construction work in 2013, offering 234 apartments in the power station, 865 in the Circus West Village buildings, and 540 more across three more buildings in the third phase, including Frank Gehry’s first residential building in Britain. 

The power station’s redevelopers have worked to retain the original character of the London landmark, reviving many of the 1930s Art Deco features throughout. 

When the development company tasked with reviving the power station and the local area launched its project in the first half of the last decade, it sought to ensure a “15-minute neighbourhood,” amassing the requisite amenities and attractions for a luxurious London lifestyle within easy reach.

The same proposal was heard at Expo 2020 in Dubai almost a decade later, where the legacy site of the grand exhibition has this year been tipped to become the world’s first “15-minute city.”

But it is in London where Gulf investors are finding the concept readily available, nestled into the modern tapestry of brickwork and glass that hugs the south bank of the Thames.

Meriam Makiya, head of residential at the Battersea Power Station Development Company, told AGBI: “We have seen a significant rise in enquiries from Middle Eastern purchasers since Ramadan, and a growth in visits since the start of the summer holidays, which is traditionally a popular time to visit the UK.

“The ‘15-minute’ live, work and play concept has been a major draw for all our buyers.”

She added: “There are only a handful of developments that have the scale we have, which allows us to create this incredible neighbourhood with restaurants and shops, and private residents’ amenities including gyms, gardens, pool, resident lounges and screening rooms.”

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Alex Carr, a director within real estate advisor JLL’s Prime Central London New Homes team, told AGBI that the flurry of visits from Gulf buyers to Battersea is being felt across the capital.

“London has historically always been an extremely popular destination for people from the Gulf states — and therefore highly popular with investors,” he said. 

But while Gulf investors have historically been drawn to the so-called “golden postcodes” of Chelsea and Kensington, Battersea has until now been unable to compete.

Carr thinks that the expansion of public transport and the flourishing local amenities has grabbed their attention.

“For some reason the south side of the river, including Battersea has always felt far away and inaccessible from the likes of Kensington, Chelsea, and Knightsbridge, areas that have been popular with MENA investors for many years, even though in reality Battersea Power Station is around15 minute walk from Sloane Square,” he said.  

“However, with the development beginning to reach its full potential and the opening of the new tube station, it suddenly feels closer and more accessible to London’s golden postcodes than ever before.”

The vibrant restaurant offerings will also soon to be matched with famous brand name shops well known throughout the prime London postcodes and beyond.

Carr added: “Many buyers are cash rich and want to diversify their assets. This return to normality post Covid is driving an increase in investment activity from the Gulf states and we forecast this to continue over the next six to 12 months.”

May’s UK residential sales instructions were the fifth highest monthly total in a decade, rocketing up by 35 percent from April. And London rents are up 26.4 percent in the year to Q1 2022.

Knight Frank has revised up its UK house price forecasts for the year in a late-June note, increasing its forecast for prime central London up from 3.5 to 4 percent, citing the market being “buoyed by strong domestic demand as international buyers make their gradual return to the capital.”

MENA interest is taking up a significant chunk of that renewed international interest, with Shuaa Capital, a top asset management and investment banking firm in the Gulf, eyeing the perfect storm of a weak pound and post-pandemic revival by announcing that its subsidiary Northacre has linked up with central London hotel the St Regis hotel to develop a new residential property.