UK-India Cross Border Investment Set to Grow to £10-15 Billion by 2018: Jones Lang LaSalle

UK-India Cross Border Investment Set to Grow to £10-15 Billion by 2018: Jones Lang LaSalle
Leading UK Developer, The Berkeley Group, Launches London Developments in Delhi and Mumbai

Mumbai, India, 7 August 2008 – Spurred by India’s rapid economic acceleration and continued growth in the medium term, India has seen an unprecedented rise in individual wealth and in the emergence of High Net Worth Individuals (HNWIs). As a consequence, an increasing outward trend in cross border residential investment by Indians in international markets like the UK is increasingly gaining prominence. According to the report, ‘UK-India Cross-border Residential Investment’ released by Jones Lang LaSalle today; Indians could potentially own 20,000 - 30,000 UK residential properties over a 10 year horizon.

A favourable investment environment makes the UK a preferred residential investment market for India’s rising HNWIs and burgeoning middle class population. With no restrictions on Indians investing in UK residential property and strong house price growth, the market will continue to see the current investment size of £0.6 – £1.2 million grow exponentially over the next 10 years, according to the report.

UK residential property headlines have been grabbed by the purchases of Ultra HNWIs like Lakshmi Mittal who have bought a number of homes in the past couple of years. However, there has also been a growing tide of lower-profile purchases by Indians. The number of such Indians with the propensity to invest in the UK residential market is likely to increase to 583 million by 2025 coupled with another 400,000 HNWIs (four times the current base today) by 2017.
In response to this growing appetite for UK property, The Berkeley Group, one of the most respected names in the UK property market, will be launching two of its most exciting developments at exhibitions in Mumbai and Delhi. Two of the principal divisions of The Berkeley Group, St George and St Edward Homes, will be showcasing Aquarius House in Vauxhall, South London, and Stanmore Place in Stanmore, North London in India in August.

Of its international clients, Berkeley has found particularly success among Asian investors. Paul Vallone, Managing Director, Berkeley Homes (Urban Living) Ltd. said “As the Asian middle class grows, more of them are looking abroad for sound investment opportunities. Parents choose an apartment that they can pass on to their children when they go to university, while business travellers will often buy a ‘lock up and leave’ flat that they can use during regular trips to London. Indian investors are some of the most discerning buyers in the world and we believe that, because all of our projects are built in convenient and sought-after locations with the highest level of specification and security, they are ideally suited to such purchasers.”

The Berkeley Group has recently announced that two of its principal divisions, St George and St Edward Homes, will be travelling to India to launch two of its most exciting developments to date: Aquarius House in Vauxhall, South London, and Stanmore Place in Stanmore, North London. Using the specialised local knowledge of Homebay Residential – the residential arm of Jones Lang LaSalle Meghraj, these developments will be exhibited in both Mumbai and Delhi.

‘UK-India Cross-border Residential Investment’ continues to add that the combined growth in the Indian economy and the level of wealth creation to date, it is clear that the potential spend on UK residential property investment can be huge over the next ten years. It further says, “Specific predictions are difficult but broad assumptions give one some idea of the potential scale of investment. Currently, the proportion of any individual’s wealth invested in property is typically 20% of all assets. We can also make the assumption that the approximate proportion of wealth invested in the UK rather than elsewhere is 10%. By combining these numbers the following seem quite plausible over the next 10 years.”

Raminder Grover, Managing Director, Homebay Residential (a subsidiary of Jones Lang LaSalle Meghraj), said “UK-based developers are increasingly interested in attracting investors from India. They are targeting not only the high net individuals but also the upper middle segment. The UK represents a very amenable market for Indian investors - the British Pound is far more stable than the rupee, there is far greater transparency in the UK real estate market, UK tenants sign long leases of up to 25 years and their long-term income generation capacities are extremely stable, not to forget the London Olympics in 2012. These factors are of great importance to investors in such projects.”