High prices and foreign buyers have Londoners hot and bothered as luxury apartments keep springing up in the Nine Elms district of London.
About a week ago, Aykon Nine Elms was launched in Singapore. The project has apartment interiors which will be fitted out by Versace, but it is just one of many luxury apartments in the area.
About 20,000 homes are in the pipeline over the next 10 to 15 years in Nine Elms, in the borough of Wandsworth. Launches in the past few years include the landmark Battersea Power Station project, involving a Malaysian consortium's restoration of the decommissioned power plant.
However, locals are not thrilled. Battersea Power Station, whose backers comprise SP Setia, Sime Darby and the Employees Provident Fund, has come under fire amid news of early investors flipping their units for tidy profits after paying off only 10 to 20 per cent of the property price.
London is facing a severe housing crunch, and critics argue that these luxury developments do not meet the needs of middle-class and lower-income Londoners. CBRE director of international marketing Sarah Nicholson said that on a per sq ft (psf) basis, prices in the Nine Elms area are roughly double the borough average, ranging from £1,600 to £2,000 psf (S$3,400 to S$4,250).
Another complaint is that luxury properties are being flogged to foreign buyers at the expense of British homeowners.
In 2013, Vanity Fair reported that most of the homes in Knightsbridge's exorbitant One Hyde Park development were owned through offshore companies registered in places such as the Cayman Islands or British Virgin Islands. Roughly a tenth of Battersea Power Station buyers are Singapore-based.
Developers have taken pains to assuage the concern over foreign buying, with Battersea Power Station Development Company announcing last year that in its second phase, where units were first offered on the local market, 75 per cent were British residents - up from 45 per cent in the first phase.
Another project, Nine Elms Point, has also been marketed strictly in Britain so far, due to overwhelming interest from Londoners.
Nonetheless, developers are still courting Asian buyers, and Singaporeans have already made up 5.3 per cent of overseas buyers in prime London, according to Knight Frank.
Mr Ziad El Chaar, managing director of Aykon Nine Elms' Dubai developer Damac, said development plans for Nine Elms will have "an equal distribution across all the social categories, and I think this is very healthy".
Hit by a hike in stamp duty, London home prices may have sunk this quarter, but there is still demand outside traditionally expensive areas such as Knightsbridge and Kensington and Chelsea in Central London.
Mr El Chaar said Nine Elms will offer "a more affordable option for people who want to live very close to Central London", where prices can go up to £3,685 psf.
