London's luxury new-build property market is being buoyed by Asian buy-to-let investors, part of a continuing sign of Asian buying of such luxury real estate.

London’s luxury new-build property market is being buoyed by Asian buy-to-let investors, who are developing a taste for modern and lateral living space, say London-based estate agents.

The UK capital’s most desirable areas are being transformed by a host of new-build developments, targeting Asians in search of a "safe haven" investment to park their cash.

“The Year of the Dragon has seen a renewed surge in demand for new-build luxury London property from Asian buyers, and it shows no signs
of stopping,” according to Camilla Dell, founder of London-based Black Brick Property Solutions.

She pointed out that the shortage of available properties for sale combined with the historically low interest rates and the weakening sterling, is playing a role in demand. Singapore now benefits from a 36 per cent discount since 2007 due to currency exchange - an extra few per cent up on last year.

The imbalance between supply and demand is pushing up prices of the best London properties. Against a backdrop of continued global uncertainty, the average per
square foot of values in prime London grew by 5.3 per cent in 2011, according to agent Knight Frank.

"The demand from overseas investors, Asian buyers in particular, for newly-built apartments has gathered pace in 
the last few years, most notably since the collapse of Lehman Brothers,” said Simon Deen of London agent Aston Chase. He added that demand for top quality properties is far outweighing supply.

As the Asian economies flourish, the newly-wealthy continue to see London as an extremely desirable place to either own a home, invest
capital or both, he added.  

“By buying off-plan, investors see themselves as
ahead of the market, in that they can buy at 'today's prices' and with
completion normally set for 18 months to two years following exchange of contracts, take delivery of the apartments at tomorrow's values,” he added.

This effect of this new stream of demand and lack of supply is forcing developers to think "out of the
 box" in finding new development opportunities. Former offices are being converted and typical London architecture is being re-vamped to accommodate new-build designs behind the traditional, listed architecture.

"London developers are scrambling to satisfy this demand for new-build units,” said Martin Bikhit from leading independent Central London Estate Agents Kay & Co.

“For the first time in a decade we are seeing newly-developed properties being
created from former offices and hotels. The added appeal of these
conversions is that the building styles lend themselves to lateral space. Our international purchasers, in particular from Asia still favour
properties with good lateral rather than vertical space and are willing to pay a premium to secure the best properties,” he added.

Lateral living

Top-end specialist developers in prime central London are responding to a growing requirement from Asian purchasers to develop the latest new-build properties across one level. The more traditional London "townhouse" that encompasses several
 stories and lots of stairs from a basement upwards, is being shunned.



"In Singapore buyers prefer single level, large open-plan penthouses over duplex or triplex apartments,"
and it is this preference that is now influencing construction trends in London as more Asians use their purchasing power in London," said Wendy Tang of Knight Frank in Singapore.

The demand has triggered a host of new developments or modern renovations – which are being marketed increasingly to Asian buyers.  

“We have seen a lot of former office space converted to new build residential, to satisfy this demand, also old style London architecture revamped to accommodate the desire for lateral living,” she added.

Developers looking East

The Asian predilection for a lateral style has influenced residential developer Northacre, the developer behind The Lancasters in Hyde Park, for example.

Here, three quarters of the units are sold – nearly a fifth of which have been sold to Asian purchasers. The scheme has the
added appeal of having a bespoke penthouse designed by David Linley, nephew to Queen Elizabeth II.

"At The Lancasters we have designed five lateral apartments ranging to 3,850 square foot that have 
stunning views, south over Hyde Park. We adopted this lateral layout that has appealed most to our foreign purchasers - and sold particularly well to many Asian buyers,” said Klas Nilsson of Northacre.

Meanwhile, The Chelsea Townhouses at Pond Place, developed by Morpheus, are expected to be of particular interest to international markets.

“In particular, the Asian market is experiencing rapid growth and their preference for spacious and modern properties such as these are in line with
our proposition,” said Andrew Murray, founding director of Morpheus.

The townhouses occupy around 4,000 square foot of living space and each property features formal and informal open plan spaces, large floor plates and split-level living areas.