time to INVEST IN LONDON an opportunity to develop property in the world’s capital
INVEST IN LONDON
CONTENTS
introduction 6
profile
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key people london overview
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a capital place for investors
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top 10 reasons to invest
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london by numbers kreado services
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how we can help
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project process
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medium scale case study
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large scale case study collaboration profile
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sidell gibson architects
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“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
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contact Holford Mews, Cruikshank Street London, WC1X 9HW United Kingdom +44 (0) 203 602 3181
introduction
www.kreado.co.uk info@kreado.co.uk
profile kreado is a UK-based company located in central London providing consulting services for property development and architectural 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 development projects in London and monitor the entire process that is particular 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.
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INVEST IN LONDON
key people Our team is a composition of talented individuals with complementing skill sets. Our extensive experience in varying sectors allow us to provide a quality service to our clients that is a unique combination of financial savvy and design excellence.
introduction
Alper Gohkan ERDEM
M.Sc., B.Arch, Managing Director
Alper has practiced architecture in the UK for over a decade, working on prestigious high-end residential, commercial and mixed-use schemes. In 2008 he cofounded kreado to help clients abroad develop their investments in real estate within the UK.
Dogan KARALAR
M.B.A., BE.con, Managing Director
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 developments.
Gavin FUNG
BSc(Hons), DipArch RIBA, ARB, MRIAI, Associate
Gavin is a chartered architect with over 17 years of experience in master planning, 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 KWAN
B.Arch, B.E.S., Associate
Anthony is responsible for much of the creative aspects of the company including architectural design, graphic design, marketing and visualization. With over 8 years of architecture work in the UK, in addition to 6 years international experience, he can design and deliver schemes at an exceptional speed.
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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.
london overview
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.
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completed in March 2009, by Project Grande (Guernsey) Limited
© Candy and Candy
One Hyde Park, located in Knightsbridge, London,
INVEST IN LONDON
london overview
Š The View From The Shard
top 10 reasons to invest 1
reliability and low risk
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predictability
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international high demand with over 50 nationalities investing in the property market
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prime triple-A credit rating
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majority of property investments are from overseas and independant from the general UK economy
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sustained demand from UK financial sector buyers
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insufficient property supply
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attractive tax regime for overseas investors
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simplicity and efficiency of the UK legal system and market practices
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cash buyers, not dependant on mortgages
The Shard, located in Southwark, London, completed in July 2012, by Sellar Property Group
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Š Renzo Piano Building Workshop
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£11.7bn 75%
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.
Three quarters of Fortune 500 companies have a London office.
London continues to be a vibrant tourist destination, attracting 15.2 million international visitors in 2011, 3.4% more than in 2010.
480
15.2m 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’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.
7.83m
Source: The BNP Paribas Real Estate Guide; Jones Lang lasalle The Central London Market Q3 2012
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London by Numbers UK House Price Forecasts
Source: Jones Lang LaSalle, Nationwide
It is a great time to make an investment in the UK property market as house prices rise immediately from the time of purchase at a significant rate.
Central London House Prices Source: Land Registry
During the recession central London house prices showed great resiliency. It remains strong through times of instability.
UK GDP Growth Above Trend by 2013
Source: Jones Lang LaSalle, Oxford Economics
The UK economy is recovering from the recent recession. This recovery is largely fuelled by London’s business confidence.
Š Jason Hawkes
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how we can help
kreado services
Our team is assembled to successfully manage and complete every 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 drawings, 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.
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INVEST IN LONDON
BRIEF details of our client’s requirements are essential to search for the right project
MARKET RESEARCH
kreado services
we especially concentrate on “off-market” projects
FEASIBILITY initial study of the scheme
OFFER offers are placed on behalf of the client and negotiations begin
BUYING
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.
formal process that can be shortened for “cash buyers”
DESIGN evaluation of the general design to suit our client’s needs
PRODUCTION detail design of the entire scheme
TENDER CONSTRUCTION MARKETTING SALE 15
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 permission granted schemes that shorten the overall period of the investment. This particular example is minutes away from London’s well-known embassies zone. The planning permission allows for extensions 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.
kreado services
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: Project Cost*: Estimated Sale Price: Return on Investment:
£ 9.5 m £4m £ 21 m %55
*including construction, services, legal fees
street view of
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existing property; drawings of proposed changes
INVEST IN LONDON
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 features 13000 m2 of mainly office accommodation. High-spec residential 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 ÂŁ8M. This generates a very successful 13% yield as the overall development costs were ÂŁ60 m including property purchase, construction and services.
kreado services
This particular case is a good example of how to develop an existing building in central London by retaining the façade, rather than finding empty sites away from Central London.
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sidell gibson architects kreado and Sidell Gibson Architects collaborate on projects that demand high levels of resources and coordination. This relationship allows an expanded team of professionals to respond to our client’s requirements.
collaboration profile
Sidell Gibson Architects has been practicing in the UK for the last 35 years, holding many prestigious awards for its successful projects, many of which are located in central London. Mainly specialized 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
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One New Change, London
INVEST IN LONDON
Holford Mews, Cruikshank Street London, WC1X 9HW United Kingdom +44 (0) 203 602 3181 www.kreado.co.uk info@kreado.co.uk