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kreado's guide to investing in london's property market for overseas buyers
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time to INVEST IN LONDON
an opportunity to develop property in the world’s capital
INVEST IN LONDON
CONTENTS
introduction
london overview
kreado services
collaboration profile
profile
a capital place for investors
how we can help
sidell gibson architects
london by numbers
medium scale case study
key people
top 10 reasons to invest
project process
large scale case study
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8
14
18
12
16
7
9
15
17
3
4
“You find no man, at all intellectual, who is willing to leave London. No, Sir, when a man is tired of London, he is tired of life; for there is in London all that life can afford.”
Samuel Johnson (English poet, critic and writer)
View of the Thames River with the London Eye and the Houses of Parliament 5
introduction
profile
kreado is a UK-based company located in central London provid-
ing consulting services for property development and architec-
tural design.
As London is considered the “World’s Capital” for many industries,
with significant foreign-interest activity easily sustained within, it is
the ideal location to invest in the property sector.
Development opportunities arise within this high-speed business
environment at a spectacular rate.
We act as a representative to our clients abroad for their develop-
ment projects in London and monitor the entire process that is par-
ticular to the building industry in the UK. We ensure that the investor
benefits from a profitable return and also enjoys a rich experience
through the design process.
This brochure is meant to give an impression of “why” and “how”
to approach investing in London property and express the services
that kreado can provide to help.
contact
Holford Mews,
Cruikshank Street
London, WC1X 9HW
United Kingdom
+44 (0) 203 602 3181
www.kreado.co.uk
6
INVEST IN LONDON
introduction
Alper has practiced architecture in the UK for over a decade, working on presti-
gious high-end residential, commercial and mixed-use schemes. In 2008 he co-
founded kreado to help clients abroad develop their investments in real estate
within the UK.
Alper Gohkan ERDEM M.Sc., B.Arch, Managing Director
Dogan KARALAR M.B.A., BE.con, Managing Director
Gavin FUNG BSc(Hons), DipArch RIBA, ARB, MRIAI, Associate
Anthony KWAN B.Arch, B.E.S., Associate
Dogan is an economist who has developed businesses in Turkey and the UK.
As cofounder, he represents the financial components of the company and is
responsible for market research and analysis. He has created close relationships
with leading property agents in London to find the best value for potential de-
velopments.
Gavin is a chartered architect with over 17 years of experience in master plan-
ning, urban and architectural design and has worked in the UK, Ireland and
Hong Kong. He specializes in environmental design engineering. Gavin’s highly
sustainable approach has won several awards for its implementation in housing
schemes.
Anthony is responsible for much of the creative aspects of the company includ-
ing architectural design, graphic design, marketing and visualization. With over
8 years of architecture work in the UK, in addition to 6 years international experi-
ence, he can design and deliver schemes at an exceptional speed.
key people
Our team is a composition of talented individuals with comple-
menting skill sets. Our extensive experience in varying sectors al-
low us to provide a quality service to our clients that is a unique
combination of financial savvy and design excellence.
7
london overview
a capital place for investors
The UK capital has opportunities for all investors: from those seeking
core returns to those with an appetite for risk. Their enthusiasm is
strengthened by London’s simplicity, transparency and efficiency.
International investment is a solid feature of London’s property
market, maintaining its presence even in the depth of the financial
crisis – overseas investors spent almost £10bn on commercial property
in 2008 and 2009. Overseas buyers accounted for half of all investment
into central London in the first half of 2011. We are confident that this
trend will continue.
One Hyde Park,
located in Knightsbridge, London,
completed in March 2009,
by Project Grande (Guernsey) Limited
The Shard,
located in Southwark, London,
completed in July 2012,
by Sellar Property Group
© C
an
dy a
nd
Ca
nd
y8
INVEST IN LONDON
london overview
top 10 reasons to invest
reliability and low risk
predictability
international high demand
with over 50 nationalities
investing in the property
market
prime triple-A credit rating
majority of property invest-
ments are from overseas
and independant from the
general UK economy
sustained demand from UK
financial sector buyers
insufficient property supply
attractive tax regime for
overseas investors
simplicity and efficiency of
the UK legal system and mar-
ket practices
cash buyers, not
dependant on mortgages
1
2
3
4
5
6
7
8
9
10
The Shard,
located in Southwark, London,
completed in July 2012,
by Sellar Property Group© T
he
Vie
w F
rom
Th
e S
ha
rd
9
10
© Renzo Piano Building Workshop 11
75%
480
15.2m
7.83m
£11.7bnThree quarters of Fortune 500 companies
have a London office.
Investment volumes reached £11.7 billion, 41% ahead
of the 2011 annual total. Activity has been driven by
overseas equity, notably Asian investors accounting
for 20% of the total, the highest on record.
London is home to more than 480 overseas banks, more than any other city in the
world. There are more Japanese banks than in Tokyo and more US banks than
in New York. More than half of the businesses in the FTSE 100 and over a fifth of
Europe’s largest 500 companies have their headquarters here.
London continues to be a vibrant
tourist destination, attracting 15.2
million international visitors in 2011,
3.4% more than in 2010.
Source: The BNP Paribas Real Estate Guide; Jones Lang lasalle The Central London Market Q3 2012
London’s population has grown every year since 1998 and stood
at 7.83 million at the end of 2010. The upward trend is expected
to continue until 2031.
12
London by Numbers
UK House Price ForecastsSource: Jones Lang LaSalle, Nationwide
It is presently a great time to make an invest-
ment in the UK property market as house pric-
es rise immediately from the time of purchase
at a significant and reliable rate.
Central London House PricesSource: Land Registry
During the recession central London
house prices showed great resilien-
cy proving that it will remain strong
through times of instability.
UK GDP Growth Above Trend by 2013Source: Jones Lang LaSalle, Oxford Economics
The UK economy is recovering from the recent
recession. This recovery is largely fuelled by
London’s business confidence.
© Jason Hawkes
13
kreado services
14
how we can help
Our team is assembled to successfully manage and complete ev-
ery stage of a building project for investment in London. We can
be involved from the onset of the process to the very end. Among
other responsibilities, we are adept in searching sites to satisfy our
client’s needs, negotiating contracts, appointing solicitors and
third parties, testing schematic designs, creating production draw-
ings, conducting tender actions, handling contract administration
and finally selling the development.
We closely initiate and monitor these key operations on behalf of our
clients to achieve impressive and controlled results.
INVEST IN LONDON
kreado services
15
project process
The property development process is
unique to every project and client but
can be generally summarized by this
diagram, which is the framework for
our practice.
BRIEFdetails of our client’s
requirements are essential to search for
the right project
TENDER
SALE
MARKET RESEARCH
we especially concen-trate on “off-market”
projects
FEASIBILITYinitial study of the scheme
PRODUCTIONdetail design of the entire scheme
MARKETTING
CONSTRUCTION
BUYINGformal process that can be shortened for “cash buyers”
OFFERoffers are placed on
behalf of the client andnegotiations begin
DESIGNevaluation of the general
design to suit our client’s needs
kreado services
medium scale case study: chester street
This medium scale development opportunity is a Grade II Listed
Freehold house in Belgravia. It benefits from having full planning
permission for significant upgrades on the property. In order to
eliminate our client’s risk on revenues, we aim to develop permis-
sion granted schemes that shorten the overall period of the in-
vestment. This particular example is minutes away from London’s
well-known embassies zone. The planning permission allows for ex-
tensions in the rear of the house, the construction of a basement,
and further amenities such as a new lift, garage, swimming pool,
and extra terraces.
The new gross internal area (GIA) would be 7,000-7,250 sq ft; with a
potential sale value of £2500-£3000/sq ft depending on the interior
specifications. Our estimate of sale is over £20 m, with a return on
investment ratio above 50%.
Basic Financial Analysis
Site Purchase Price: £ 9.5 m
Project Cost*: £ 4 m
Estimated Sale Price: £ 21 m
Return on Investment: %55
*including construction, services,
legal fees
street view of
existing property; drawings of
proposed changes16
INVEST IN LONDON
kreado services
large scale case study: kingsway
This prestigious development project is centrally located opposite
to the London School of Economics. Representing a rather large
scale development opportunity in London, the building now fea-
tures 13000 m2 of mainly office accommodation. High-spec resi-
dential units are located at roof level and reputable restaurants
are at ground and basement levels.
The developer currently rents all floor area for a yearly income of
£8M. This generates a very successful 13% yield as the overall de-
velopment costs were £60 m including property purchase, con-
struction and services.
This particular case is a good example of how to develop an exist-
ing building in central London by retaining the façade, rather than
finding empty sites away from Central London.
17
collaboration profile
sidell gibson architects
kreado and Sidell Gibson Architects collaborate on projects that
demand high levels of resources and coordination. This relation-
ship allows an expanded team of professionals to respond to our
client’s requirements.
Sidell Gibson Architects has been practicing in the UK for the last
35 years, holding many prestigious awards for its successful proj-
ects, many of which are located in central London. Mainly spe-
cialized in office and residential-use, SGA is capable of delivering
complex mixed-use schemes such as the recently completed,
award-winning, One New Change project located adjacent to
London’s cherished St. Paul Cathedral.
Bartholomew Lane, London
One New Change, London18
INVEST IN LONDON
Holford Mews,
Cruikshank Street
London, WC1X 9HW
United Kingdom
+44 (0) 203 602 3181
www.kreado.co.uk