Iain Johnson, CEO of Rigby & Rigby, discusses why London remains a popular choice for Middle Easterners investing in property and how they add value to their London homes in conversation with Alex Casaki, Head of London Desk at Cushman & Wakefield Core. Cushman & Wakefield Core advises private and institutional clients seeking to acquire, lease or develop commercial, retail and residential projects in key locations across the UAE and worldwide.
London’s long-term position as a global property investment destination remains unwavering despite Brexit – why do you think that is? What are the key features that make London such a good city to invest in by many Middle Eastern high-net-worth individuals (HNWIs)?
Iain: London is attractive to Middle Eastern individuals who are commercially savvy and understand the long-term benefit of investing in residential property in London. Coupled with being one of the best cities to live and do business in, London consistently jostles for position with New York as the wealthiest city in the world. Middle Easterners are drawn to this international hub and the access it gives to education, restaurants, hotels, museums and business headquarters.
London is steeped in history and, due to limited expansion, space is a rare commodity increasing the demand for unique properties for international buyers.
Alex: We often hear that real estate is all about location. This is particularly true for Prime Central London (PCL), where value preservation is primarily governed by location and restricted availability.
Owners and prospective buyers recognise that prime locations are likely to be considered prime in the near as well as long-term future. This sense of capital preservation and PCL’s inherent appeal is astutely understood by UAE and wider Middle East-based investors/end-users who have historically acquired properties within the PCL districts.
Despite the uncertainty associated with Brexit we have witnessed strong interest in PCL properties from UAE buyers looking to acquire long term assets while benefiting from attractive exchange rates.
What would you name as the primary demand drivers for this demographic when investing in prime London?
Iain: We principally work with clients who are primary main residences of a property rather than for investment purposes. The biggest demand for those individuals is for business purposes due to the diversity and level of accessibility found within London and the relatively close proximity to Europe.
Alex: Most of our UAE based clients are owner-occupiers, with the properties used as vacation homes or as primary residence for their children studying overseas, thus, secondary homes, education along with business interests remain the primary demand drivers for UAE based buyers.
Middle eastern buyers have traditionally acquired properties within Prime Central London areas. Does this remain the case or have you witnessed a shift in geographical preference?
Iain: Prime Central London areas, such as Knightsbridge and Mayfair, are continuing to be popular areas for Middle Eastern buyers and we expect this trend to remain. We have seen a surge in opportunity in countryside areas which are within a close distance of London. The demands for properties in The Cotswolds have increased due to the proximity to Bicester Village, Daylesford Farm and Soho Farmhouse. Similarly, Surrey areas such as St Georges Hill and Wentworth, are continuing to be of significant interest to homeowners due to good transport links, privacy, security and extensive leisure facilities including world-renowned golf courses.
Alex: Prime Central London areas remains the key area of interest especially for clients with existing portfolios in these areas. However, with the rise of newly built developments located mainly in less central locations, certain clients have taken the view of offsetting location with build quality and amenities. With privacy and security being key, top of the line services & concierge offerings associated with these new developments continue to be the main draw.
Is there a particular design style that Middle Eastern buyers prefer? Do foreign investors in the UK tend to prefer new build developments rather than purchasing heritage buildings?
Iain: Our Middle Eastern clients are purveyors of good taste and whilst they do not have a defined style they are receptive to suggestions on what is appropriate for their property, we are certainly working with people that are passionate about making more contemporary statements in heritage buildings which is refreshing. Our passion for heritage properties in London and the limited stock in the capital means that the majority of our middle eastern clients are coming to us with restoration projects in listed properties.
Alex: While new-build developments remain the favoured option of purchase due to their contemporary finish, we have witnessed strong interest in traditional buildings in prime central locations where properties have been modernised or have the potential for redevelopment. These traditional properties are generally larger and more spacious than what is commonly found in newly developed buildings.
What type of work does Rigby & Rigby most often carry out for its Middle Eastern clientele?
Iain: Due to our full-service capabilities we often carry out work that takes a project from concept to completion. Our in-house team of development managers, architects, interior designers and contractors enables every project to be efficient, kept to budget and delivered on time. We often work with clients who are not based in London throughout the duration of their projects and are use our organised, accurate professional reporting structure to provide detailed updates at all stages of the project.
What do people typically do to their homes to increase the value?
Iain: Our architectural practice focus on any planning gain as a development proposition including basement extensions, lifts, car galleries, wine/whiskey cellars and staff accommodation. We have achieved a record-breaking price per square foot on a number of our properties by re-organising spatial relationships, provided intelligently designed integrated solutions with a level of finish and a design style that is understated, detailed and refined. This results in a home that is really useable, liveable and appealing to abroad spectrum of our client base.
Alex: With additional purchasing costs continuing to rise and the lack of properties on offer, clients are exploring planning opportunities in their homes to increase their liveable space with basement excavations and internal reconfigurations the most favoured areas of improvement. With the weakened pound clients have taken the opportunity to carry out such works as they look to add further value to their properties.
Rigby & Rigby have created some incredible projects, what has been your most challenging project?
Iain: Every project comes with its own challenges, however as a professional team we pride ourselves on being problem solvers by nature and always test our capabilities to create solutions for all our projects. Our research and in-depth analysis of product and solution make me extremely proud. We are currently producing one of London’s most complex new build private residences due to its location near the Knightsbridge conservation area and its narrow site. We are also embarking on gaining the first residential WELL accreditation for this property in the UK in response to our client’s needs and this really drives us as it’s exciting to be the first studio to deliver this and it aligns with our own values very well.
Another challenging project was our Kensington Project W8 100 which involved combining two Grade II listed buildings to create a spacious family home. The team created transitional spaces to link between contrasting sections of the house and designed a contemporary 5 metre rear floor to ceiling extension to the rear of the property. The biggest achievement on this project for the Rigby & Rigby team was installing the first car lift next to a heritage property which linked to a secure underground lift and an extensive basement. We delivered this project on time and on budget and are proud to be working with the client again on another one of their properties.
We are excelling in the collection of prestigious awards from our multiple service lines. For example, the construction and projects division at Rigby & Rigby just got platinum exemplary rated for their activity on site. Our Interior Design studio recently won an International Design et Al award for “Living Space London” for their design of a contemporary penthouse apartment.
What is next for Rigby & Rigby?
Iain: We are excited that there is a lot of new opportunity around the team at Rigby & Rigby currently which extends beyond our typical scope of residential design. Whilst maintaining our client’s privacy, we can share that we are working on projects in the hotel, yacht and private family office space which are increasing our diversity. Our considered approach to design, coupled with our knowledge of our clients and their needs, translates our offering into other projects. Through collaboration with world-renowned firms such as Kengo Kuma and Olson Kundig we are achieving some amazing results on some of our projects internationally.
What is next for Cushman & Wakefield Core?
Alex: In terms of the London desk service, we are always looking at how to improve our offerings and strengthen our affiliated network to better serve our clients and manage their requirements.
We expect London to remain a city of interest to UAE based clients and this service will remain an important part of our service offering in UAE.