Asia Bankers Club Investing in Londons Chinese Business Park

Investing in Londons Chinese Business Park

March 2014

CONTACT DETAILS PHONE + 852 3998 3001 EMAIL contact@asiabankersclub.com ADDRESS Unit 01-02, 15th Floor, Fu Fai Commercial Centre, 27 Hillier Street, Sheung Wan, Hong Kong

The Allen Gardens Estate at Hackney

London Evening Standard New Homes Awards 2012 Best Conversion - Highly Commended

The Developer

One Housing Group is a leading provider of housing across London and the South East managing over 14,500 London homes in 26 boroughs and surrounding counties and providing care and support to over 5,000 customers.

Central Square at Islington

What House? Awards 2012 Best Partnership Scheme - Bronze What House? Awards 2012 Best Interior Design -Si|ver British Homes Awards 2012 Development of the Year - Commended

The Developer

Awards Won

Central Square
What House? Awards 2012 Best Partnership Scheme - Bronze What House? Awards 2012 Best Interior Design -Si|ver British Homes Awards 2012 Development of the Year - Commended

Mastmaker Courtz
RIAI 2010 Irish Architecture Awards Best Overseas Award Evening Standard New Homes Award 2010 Best new development in the affordable homes sector

Allen Gardens
London Evening Standard New Homes Awards 2012 Best Conversion - Highly Commended

48 Church Street
Brick Awards 2009 Best Public Housing Development Building for Life Awards 2009 Silver Standard Housing Design Awards 2007 - Project Winner

Roden Court
Evening Standard New Homes Award 2011 Best new development in the affordable homes sector Sustainable Housing Award 2011 The Transformation Award What House? Awards 2011 Best development, Bronze National Home Improvement Council Awards 2011 Best Housing Association Modernisation Project- Runner up

Suttons Wharf South

Sustainable Housing Awards 2009 Transformation Award

Trees, Broadlands Road

British Homes Awards 2011 Best Lifetime Home Housing Design Awards 2011 HAPPI winner (Housing our Ageing Population Panel for Innovation) Best Design Award Housebuilder Awards 2011

Grays Inn Buildings

Camden Design Awards 2008 Evening Standard New Homes Awards 2007 Best New Conversion - Highly Commended Grays Inn Buildings, Holborn EC1R

95 - 99 Barking Road
Daily Telegraph British Homes Awards 2010 Affordable Housing Development of the Year - Commended Affordable Home Ownership Awards 2008 Best Designed Scheme

East End Mission

Daily Telegraph Your New Home Awards 2008 Best Conversion Project (Highly Commended)

Welcome to London Introducing Londons Chinese Business Park The Project: Royal Dockside

Interesting Facts About London

The current population of Greater London is nearly 8 million

London is home to 43 universities - the largest concentration of higher education in Europe

London is Europes largest city and the 6th richest in the world

London is the greenest city of its size in the world. Green space covers almost 40% of greater London

London Postcode Map

Heat Map of average rentals

Hyde Park 32 Boroughs

Hyde Park

Knightsbridge

Knightsbridge

Mayfair

32 Boroughs

Oxford Street

32 Boroughs

Palace of Westminster

32 Boroughs

London Eye

32 Boroughs

Tower Bridge

32 Boroughs

City of London Fleet Street

32 Boroughs

Canary Wharf

Canary Wharf

Royal Docklands

32 Boroughs

Canary Wharf

02 Arena

02 Arena

02 Arena

02 Arena

House Price Changes, 10 Years (%) United Kingdom Compared to Continent

Source: Global Property Guide 2013

London vs UK Property Prices

Source: Nationwide Building Society, Feb 2014

UK Interest Rates

GBP vs HKD

UK Interest Rates
Feb 12, 2014 Bank of England sought to assure homebuyers that UK interest rates wont rise any time soon because the economic recovery is still fragile

Statistics 2013

Prime central London prices up 7.5% in Year 2013, outperforming gold

Statistics 2013

Prime central London prices up 7.5% in Year 2013, outperforming gold

The Classic Ripple Effect

House prices in Londons outer suburbs are expected to outpace the city centre for the first time in a decade as the influx of foreign buyers into the capital forces families out to the commuter belt. Mainstream market house prices in the UK are set to rise 25% in the next five years (to Year 2018) as confidence improves and buyers look to markets beyond London that offer relative value.

Demand-Supply of London Properties

Demand-Supply Mismatch

The Cause of Demand-Supply Imbalance

Flight to Safety?

One Hyde Park Penthouse Sold For 140 million (2010)

London Prime Properties As Safe Haven?

What happens when the overseas economic crisis is over?

The Real Cause of Demand-Supply Imbalance

Population Growth!

UK is now the 3rd largest EU nation behind Germany and France

London Population Growth

Demand-Supply Imbalance Explained

Already nearing historic highs at 8.3m, the populace is expected to rise to 10m by 2031 London house building rates are at half the level needed to meet demand

London Needs 50,000 New Homes a Year

London Needs 50,000 New Homes a Year

70% of households earn less than 50,000 a year There is a potential oversupply of homes priced between 1,000-2,000 psf at the top end of the market

Source: Savills Research

Who is Buying and Who is Renting

5 Years Forecast of London Property Prices

Source: Savills Research

Source: Jones Lang LaSalle Research

London Boroughs Property Price Index

Newham recorded a yearly price increase of 11%, for period Jan 2013 to Jan 2014

Source: Rightmove

Capital Gain Tax Debate For Foreigners

The issue is one of tax inequality rather than a one of property cooling off measures

Help To Buy Scheme:

For maximum purchase of 600,000

Infrastructure Project 1:
Crossrail - 15b

Crossrail - Completion 2018 Crossrail is Europes largest construction project work started 5 years ago in May 2009 Crossrail project has now reaches halfway point When Crossrail opens it will increase Londons rail-based transport network capacity by 10%, supporting regeneration and cutting journey times across the city The Crossrail route will run over 100km from West to the East There will be 38 Crossrail stations including 9 new stations

Crossrail - 15b

Development Cost

Crossrail - 15b

Connecting North and South?

Infrastructure Project 2:
Nine Elms on the South Bank - 30b
At 481-acre and a total development cost of 30bn, Nine Elms on the South Bank (between Vauxhall and Battersea) is by far the largest regeneration zone in central London.

Nine Elms (The Future of Central London)

Nine Elms (The Future of Central London)

Nine Elms (The Northern Line Extension)

1bn Northern Line Extension to be ready in year 2019

Infrastructure Project 3:
The Royal Docks - 1b
A 1bn deal to transform Londons historic docklands into the capitals next business district, into a gateway for Asian and Chinese business seeking to establish headquarters in Europe as well as other businesses wanting to set up in the capital

The Royal Docks Comparable Sizes

The Royal Docks 4 Sections

(a) Royal Victoria Dock

At March 2013s international MIPIM conference, the Mayor of London announced the chance to create a floating village as part of the Royal Docks redevelopment with homes, jobs and commercial space in an innovative new space.

(a) Royal Victoria Dock Emirates Air Line

(a) Royal Victoria Dock Emirates Air Line

(a) Royal Victoria Dock Emirates Air Line

Canary Wharf O2 Arena

Royal Victoria Dock

(a) Royal Victoria Dock Britains Largest Floating Village

Britains largest floating village with homes, hotels and restaurants is to be created at the Royal Victoria Dock in east London

(a) Royal Victoria Dock Britains Largest Floating Village

The 15-acre development will be modeled on successful schemes at Ijbury near Amsterdam and Hafen City in Hamburg and others in Scandinavia. Sitting directly under the new Thames cable car, the capitals first liquid postcode is part of Boris Johnsons drive to transform the Royal Docks

(b) The Silvertown 24 Hectares

Silvertown Quays (24 hectares site) is a stunning waterside locationsouth of the Royal Victoria Dock opposite the ExCeL Centre. It will be connected to the future Crossrail station at Custom House through to Thames Barrier Park and the River Thames

This 4.2 million sq ft scheme will be anchored by innovative brand pavilions . These will give major brands a chance to showcase their products in a purpose-designed environment

(c) Royal Albert Basin 20.1 Hectares

The Albert Island (11 hectare site) is a prime location for marine-based industry and a commercial boatyard

Gallions Quarter (4.6 hectare site) is a mixed-use proposal that supports the growth of a new local centre and sustainable community in Royal Albert Basin, near Gallions Reach DLR station

Great Eastern Quay (5.5 hectare site) is a comprehensive mixed use redevelopment of a riverside site that will support a new community and includes a refurbished dock edge and marina

(d) Royal Albert Dock 14 Hectares

Royal Albert Dock - The Asian Business Park

The development will include more than 2.5 million square feet of office space, plus retail and leisure facilities and is expected to be ready for its first tenants in 2017

Royal Albert Dock The Asian Business Park

(d) Royal Albert Dock 14 Hectares

(d) Royal Albert Dock The Asian Business Park

(d) Royal Albert Dock 14 Hectares

In May 2013 the Mayor announced a 1bn investment by Chinese developer Advanced Business Parks (ABP) to turn the Royal Albert Dock site into Londons next business district

The site will host Asian and Chinese businesses looking to establish European HQs and other businesses that want to locate in London

The largest development of its kind in the UK, this is one of the first direct investments by a Chinese developer in Londons property market. It will eventually host over 3.2 million sq ft of high quality work, retail and leisure space, including 2.5m sq ft of prime office space, creating a vibrant , new 24/7 destination

The Chinese Are Here

Dalian Wanda cut its first British deals in June 2013 when it said it would spend $1.6 billion to build an luxury London hotel and buy British yacht maker Sunseeker

The Project
Royal Dockside, London E16 2QJ

Quick Facts:
Developer: Total no of units: Price: Est. Completion: Local Authority: Tenure: Transportation: One Housing Group 76 1, 2, 3, 4, bedroom homes 1st phase from 250,000 (from 450 psf) Q1, 2016 London Borough of Town Hamlets Leasehold 199 years from May 2006 Underground stations provide links to the city: Gallions Reach DLR station (5 min. walk) Stepney Green Station (District and Hammersmith & City Lines) Mile End Station (District and Hammersmith & City Lines) Limehouse Rail Station River Bus: Canary Wharf Pier

Easy Access: Docklands Light Railway

Gallions Reach to Canary Wharf in 22 Minutes

Gallions Reach DLR

Easy Access: London Underground

Easy Access: London Underground

Easy Access: Crossrail - Completion 2018

The introduction of Crossrail will likely to add 20% property values in the vicinity

Easy Access: London River Services

Easy Access London City Airport

London City Airport (LCY) is one of the easiest and most accessible airports in London owing to its location just 4.8km (3 miles) from Canary Wharf. A single runway handles short-haul flights with a strong emphasis on business travel to Europe and specialised flights to New York.

University of East London

The University of East Londons new campus features accommodation for 400 students and facilities for 5,000 students

ExCeL London Exhibition and Convention Centre

Royal Dockside

Canary Wharf

Royal Dockside

Royal Dockside

Royal Dockside

Royal Dockside

Royal Dockside

Royal Dockside

Royal Dockside

Royal Dockside

Photo Taken Jan 2014

Photo Taken Feb 2014

Photo Taken Feb 2014

Photo Taken Feb 2014

Photo Taken Feb 2014

Units Type and Sizing

UNIT TYPE 1 Bed 2 Beds 3 Beds Duplex 4 Beds Townhouses Total

SIZING 538 - 549 s.f. 753 - 936 s.f. 936 - 1,108 s.f. 1,270 - 1,367 s.f.

NUMBER OF UNITS 33 31 10 2 76

PRICE From 250,000 From 385,000 From 550,000 From 635,000 100%

Buying & Selling Costs

COST ITEMS

RATES 0% - 7% 0% for properties up to 125,000 1% for properties over 125,000 to 250,000 3% for properties between 250,000 - 500,000

WHO PAYS

Stamp Duty Land Tax (SDLT)*

4% for properties between 500,000 - 1,000,000 5% for properties between 1 million - 2 million 7% for properties over 2 million 15% for properties over 2 million purchased by corporate bodies

The Buyer

Legal Fee Land Registry Fee Selling Agentss Fees

0.5% - 1.0%** 0.04% - 0.15% 2% - 3%

The Buyer The Buyer The Seller

* Payable at completion/transfer ** Developer will contribute 1650 towards legal fees if buyer uses Kingfield

Rental Yield

Royal Dockside Payment Terms

SPECIAL PAYMENT TERMS

BOOKING
(non-refundable)

1st Payment
(within 7 days)

2nd Payment
(~Q1, 2015)

Completion / Transfer
(Q1, 2016)

30,000 HKD (~2,500 GBP)

10% Booking

10%

80%

Royal Dockside Closing Steps

Royal Dockside Investment Analysis

Conclusion

1. Demand for London properties continues to boom due to population growth. Supply continues to be limited. The Asian Business Park is in the making, drawing large inflow of investments from Asia. Royal Docks is well positioned to become the 3rd financial district of London 2. Down-payment as low as 10% or 25,000 (~HKD325,000 / SGD53,000) for purchase of a 1 bedroom unit at Royal Dockside. Price from 456 (~HKD5,900 / SGD960) psf 3. Financing up to 70% for foreigners 4. Estimated average gross yield 4-5% p.a. 5. Special deal today: 2% discount for ABC members

Important Messages
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