When we talk about investing in London properties, neighborhoods like the ritzy Knightsbridge or Chelsea come to mind. While those neighborhoods drive high prices with established and mature markets, new and developing areas provide investors with opportunities ripe for the picking.
Regeneration projects all across London are revitalizing old and developing neighborhoods with a mixture of small to large-scale projects bringing a renewed interest and spark into London’s housing market.
But what are the differences between these properties and what is the best way to leverage on this new investment opportunity?
Large-scale vs small-scale
The number of units in a project launch differs across developments. There are large-scale ones around the globe that consist of over 1000 units, and there are small-scale projects that have less than 50.
A bigger scale development would mean more competition in terms of rental and more people sharing common facilities while a smaller scale development will give you exclusivity and privacy.
Nonetheless, a large-scale development will also include more facilities and amenities with more people sharing the maintenance cost, potentially bringing the cost down. One advantage of investing in a brand new development over existing housing stock is that they tend to be more energy-efficient and are therefore cheaper to maintain.
As an investor, should you be looking into small-scale or large-scale projects?
In London, there are a significant number of large-scale regeneration projects. Unlike Singapore, developers in London are often engaged not just to build a single residential building, but to also equip them with amenities and infrastructure to create a whole new community hub for residents to embrace Live, Work, and Play – all in one area. These projects are also known as “regeneration” schemes to rejuvenate common living spaces and fulfill our modern lifestyle needs. One developer specializing in such regeneration schemes is the renowned Berkeley Group.
Building quality homes and neighborhoods across London, Birmingham and the South of England, the Berkeley Group specialises in long-term brownfield regeneration projects to revitalise underused land for modern community needs. This involves great expertise in transforming challenging and complex sites beyond the scope of conventional homebuilders.
Here are some of the key developments by Berkeley Group. At a glance, the properties are eye-catching and beautiful. What’s even more impressive is the increasing price growth ranging from 29 to 62 per cent across the different projects over the years.
Getting the most out of your large-scale property investment
Why should home buyers look at investing in big developments? To answer this common question, we need to look at some common misconceptions about property prices and the current trends in the London housing market.
Seeing that none of the profitable developments listed above are built in London’s central Zone 1, it goes to show that a property’s location may not always be the top consideration in buyers’ purchase decisions despite common beliefs.
The reason is simple – property price changes are generally affected by the volume of transactions. This means that the greater number of units bought will translate to a higher price eventually.
In the context of huge regenerations schemes scheduled to build over 5 to 10 years, the sole developer can take on a dollar-cost averaging approach and adjust each unit price over different phases of building construction. This takes into account rising costs of labour and materials and growing land value as the infrastructure gradually nears completion. The bottom line is that investors who have bought units of the new property gains from a first-mover advantage, reaping maximum profits.
If you’re concerned about increased competition on rentals, fret not as London is a city of renters. Close to 30% of Londoners are renting today and this number is expected to reach 60% by 2025 (source: PWC). As an investor, it will be good to note that the current lack of supply of good quality homes will put upward pressure on rent in the coming years.
Now, if you’re looking to buy or invest in a large-scale development with potential, you might be interested in this exciting, brand new regeneration scheme by Berkeley Group located in London.
Evergreen Point, TwelveTrees Park, London
One of the most highly anticipated large-scale developments in Central London, TwelveTrees Park comprises 3,838 homes with the entire development estimated to complete by in 2035. Phase 1 known as Evergreen Point will be first to come to the market with 205 modern and fresh private apartments set to be delivered from Q3 2023 to Q1 2024.
Offering studios, 1, 2- and 3-bedroom apartments and penthouses in the heart of up-and-coming residential East London, this fresh new property is made with the modern city dweller’s needs in mind. Right at your doorstep is the new entrance of West Ham Station, seamlessly connected to 5 different tube and rail lines – Jubilee, District, Hammersmith & City, DLR and c2c – for your convenience.
In terms of connectivity, you’ll be pleasantly surprised to find yourself just minutes away from the city, Canary Wharf, Stratford and the West End. Whether you’re looking for a quick commute to work/school or hoping to find leisure spots near home, the amenities in the vicinity won’t let you down.
Not to forget that there’s a world-class park right outside your doorstep and lush, open gardens for a breezy summer stroll, the dynamic views at TwelveTrees Park is bound to add vibrance and colour to your everyday moments.
All in all, Evergreen Point, TwelveTrees Park presents one of the best opportunities to invest into Phase 1 in a large-scale regeneration development today, with investors benefiting from first movers’ advantage, the best choice of units, and the best prices.
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