Sime Says Strong Pound Cooling Malaysian Interest in UK Properties

Posted on: 2015-08-19

KUALA LUMPUR, Aug 19 '” Sime Darby Bhd reported a 'softening interest' of Malaysian buyers in its London properties due to the British pound's rise versus the sharply falling ringgit.

According to UK daily The Independent, Sime Darby's luxury homes in its 42-acre Battersea development has also experienced a 10-per cent drop in value as the home property sector remained volatile, dampening demand for London's high-end penthouses.

'We are witnessing softening of interest among buyers from Malaysia and Southeast Asian regions, probably due to the prevailing volatile currencies and uncertainty in economic outlook,' the Independent quoted Sime Darby as saying in a statement.

The conglomerate noted, however, there have not been any contract cancellations so far.

Emeritus professor of economic geography at the London School of Economics Pau Cheshire also told the Independent that the image of English being a haven for foreign property investors in the wake of the economic crisis is starting to taper off as London property is now seen as a 'risky' investment.

'Conditions in financial markets and such low interest rates have converted property and especially top-end housing into an investment asset '“ yields are so low on such a wide range of assets,' Cheshire was quoted as saying.

Online estate agent eMoov also recorded a three per cent drop in demand for housing in London worth over £2 million (RM12.8 million) just this May in 60 per cent of 'prime' London boroughs such as Westminster, Kensington and Chelsea.

The daily also cited global property consultant Knight Frank as saying that purchases of prime London property by Chinese-nationals, Russians and Singapore-based purchases have also slumped in the first six months this year compared to the same period in 2014.

Russians bought 2.9 per cent of London properties this year compared to 6.7 per cent last year while buyers from Singapore dropped by more than half to 1.4 per cent this year.

Chinese investors dropped from 10.9 per cent in the first six months of 2014 to 9.4 per cent the same period this year.

This comes after Transparency International, a global nongovernmental organisation which reports on political and governmental corruption, revealed last month that over 36,000 London properties, including up to 9.3 per cent of properties in the City of Westminster, were owned by offshore companies in areas which protect their identity.

The research prompted British Prime Minister David Cameron to pledge stricter Land Registry listing of foreign companies in an attempt to obtain better transparency, adding that there was no place for 'dirty money' in the country.

The ringgit has fallen sharply versus other currencies, particularly the US dollar, due to monetary policy decisions in the US and China, crashing commodity prices, and 'unresolved politics' stemming from a local scandal.

The ringgit is currently trading at 4.09 versus the dollar and 6.41 to the pound sterling.


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