British developers seek homebuyers from Hong Kong
Despite signs that Britain's property price rally may be coming to an end, two very different English developments are being offered to Hong Kong investors.
The first, aimed at those seeking a quiet life, is a former hotel in the county of Somerset that has been converted into 15 units.
Carnarvon Arms Apartments is in the countryside near the town of Dulverton. Units range from 650 square feet to 1,600 sqft, and prices start at GBP160,000 (HK$2.2 million), according to Brian Catton, managing director of developer JCQ Homes. The largest apartment costs GBP380,000.
The development - which is a three-hour drive from London - has a concierge to look after the properties while the owners are away.
'The concierge unit has been very popular, with inquiries from people in London who will use this as a holiday home,' Mr Catton said.
The apartments are mainly being marketed in Britain. Two units have already been sold to buyers in London and Mr Catton hopes to sell another couple in Hong Kong.
Possible buyers from Hong Kong include British expatriates visiting home every year or those with children studying at nearby universities such as Bristol and Exeter, according to Mr Catton.
Speculative buyers might also prefer the Carnarvon Arms as a cheaper investment compared with options in more popular areas such as London, where similar sized apartments were much more expensive, Mr Catton said.
The second development being offered to Hong Kong investors in the coming weeks is the large Royal Arsenal development in the Woolwich area of London.
Situated along the south bank of the Thames, the development has units ranging from #170,000 for a one-bedroom flat to #392,500 for a three-bedroom duplex.
The development is expected to be completed in the spring or summer of 2006. The developer, the Berkeley Group, is backing an annual 7 per cent rental yield for the first 18 months after completion.
Royal Arsenal is a former military depot and the surroundings are being transformed in one of the London's largest regeneration projects.
Residential and commercial developments are being interwoven with the area's historical buildings. A museum displaying artefacts from the Royal Regiment of Artillery was opened in 2001.
The residential area of the project is being marketed in Hong Kong by Colliers International, with a local exhibition at the end of this month.
The properties are being marketed at a time when some analysts argue that the long-running boom in British property prices is at an end. The International Monetary Fund recently voiced concerns in its World Economic Outlook report that British house prices were 15 per cent to 20 per cent overvalued and the risk of a sharp correction had increased with rising interest rates.
Such concerns about Britain's housing market may deter some speculators from considering Carnarvon Arms, according to Mr Catton. But he believes the development will still attract long-term buyers who want a home in the countryside.
'It's the people who are looking speculatively, thinking of an investment, wondering whether to wait - those are the people who would maybe sit tight and say: 'Let's see if the prices come off and then we can talk seriously'.
'But I think if someone really wants something they'll go for it,' he said.
