London Daily

Focus on the big picture.
Saturday, Jun 13, 2026

London’s Luxury New Home Slump Stings Asian Developers

London’s Luxury New Home Slump Stings Asian Developers

On the edge of London’s Canary Wharf district, the tallest residential skyscraper in western Europe was due to open this year. The Spire London’s hype gushed about the possibility of drones delivering food to residents in between their visits to the tower’s cinema and swimming pool.

Instead, all that’s rising from the board-up site owned by Chinese developer Greenland Holdings Corp. is weeds.

It’s just one cautionary tale for Asian homebuilders who flocked to the city, expecting overseas investors to follow them and buy apartments that locals can’t afford or don’t want. After accounting for two-thirds of land sales by value as recently as 2017, developers from the region have been largely absent since. They failed to buy a single plot of land in the capital through July this year, according to data compiled by Real Capital Analytics Inc.


Weeds grow at The Spire London site next to the Canary Wharf district, Dec. 11.


In Greenland’s case, the developer reportedly paused the project in 2018 as the outlook for London property worsened and tall buildings came under increased scrutiny following the Grenfell tower fire that killed 72 people.

Tricky Market’


“From an international developer standpoint, London is a tricky market to crack,” said Martin Zdravkov, head of U.K. residential investment at LaSalle Investment Management. “The last four or five years have been difficult ones.”

Developers from Asia struggled to secure sales at some projects as the fallout from the 2016 vote to leave the European Union, changing rules around building design and more taxes on foreign buyers damped demand. Now, they face a new headwind: apartment values are falling as the pandemic leads many to reassess where they want to live.

The value of those homes across London fell 40,000 pounds ($54,400) in the year through September, despite a broader U.K. housing boom, as buyers prioritize larger homes with gardens. New home sales in central London are on track to fall to the lowest since 2011, a contrast to the wider city where purchases are up on last year, according to researcher Molior London.

The market for cheaper new homes is stronger because of a stamp duty sales tax holiday and the government’s Help to Buy program, which provides loans for purchasers who only have a small down payment on properties sold for as much as 600,000 pounds.


Tax Rises


On Grosvenor Square in London’s Mayfair district, Indian developer Lodha has agreed the disposal of about half of the luxury apartments it’s building at the former Canadian embassy. The homes, replete with an on-site private spa and billiards room, were first offered for sale in 2017. Tax increases and Brexit have made future investment difficult, Gabriel York, co-head of the firm’s U.K. unit, said in an interview.

“It’s affected customers’ behaviors, appetites, desires,” he said in October. “Every time one of these changes is made it causes a six-month pause, as people reflect, ‘what does that now mean for what I want to do.’” The firm still believes in central London, he said.

Asian developers were drawn to the U.K. as the pound weakened following the Brexit vote, while land prices also fell slightly as the economic outlook worsened, according to James Barton, a partner at broker Knight Frank LLP, who traveled to the region at the time to source buyers for sites in the capital.

Even earlier, one of Hong Kong’s richest families took a bite. In west London, the second phase of the Earl’s Court Lillie Square project, part-owned by members of the Kwok family, has yet to sell out -- five years after the 186 homes were first offered for sale. South of the River Thames, the Malaysian developer of apartments and offices on the Battersea Power Station site recently took an impairment charge of 156 million pounds on the project, which is valued at about 9 billion pounds.

In St. John’s Wood, a district favored by American bankers, construction hasn’t even started at a site bought by Malaysian billionaire T. Ananda Krishnan in 2011 for a reported 250 million pounds. There are weeds growing at the front of the plot, a former barracks.

Larger developments like Lillie Square and Battersea are suffering because of the tax changes for overseas buyers, according to Camilla Dell, managing partner at buying agent Black Brick Property Solutions. “That part of the new development market in London is challenged and has the potential for price falls,” she said.

Greenland, which has almost sold out its Ram Quarter project in Wandsworth, did not reply to questions. Kwok’s flagship developer Sun Hung Kai Properties Ltd. declined to comment and Krishnan wasn’t reachable.


Hong Kong Boost


There is one big positive trend for Asian-based developers. The U.K. will introduce a new route to citizenship for almost 3 million people in Hong Kong in January, which may boost demand.

The number of new London homes sold overseas rose to 860 in the third quarter, a 40% increase on the fourth quarter of last year, the last period before the pandemic disrupted sales, according to Molior.

Read more: U.K. Grants Hongkongers 5 Passports a Minute as Exodus Looms

Still, missing out on the rush to purchase homes during the stamp duty tax holiday could prove damaging for some developers, given the outlook for sales next year is poor. An additional 2% levy on overseas buyers is due to be introduced in April, the same month the jobs furlough support programs that have kept millions in employment are due to end.

Brexit is also expected to hurt the economy after Britain formally leaves the EU’s single market on Jan. 1. Bloomberg Economics estimates the new frictions mean growth will be 0.5 percentage points lower a year for the next decade than if the U.K. had stayed in the bloc.

Some projects would have struggled regardless because developers read the market wrongly or didn’t pick the right location, according to Peter Rees, Professor of Places & City Planning at University College London.

“Brexit and Covid-19 are being used as convenient excuses for the failure of ill-conceived development projects,” he said.

Newsletter

Related Articles

0:00
0:00
Close
UK Competition Watchdog Investigates Ryanair Family Seating Charges
Imperial College Study Links London Emissions Charges to Lower Hospital Admissions
Scottish First Minister Launches US Trade Initiative Ahead of World Cup Match in Boston
Fifteen Million Workers Gain Expanded Sick Pay Rights Under UK Reforms
British Retail Investors Secure Record Participation in SpaceX Share Offering
Keir Starmer and Micheál Martin Coordinate Response to Northern Ireland Violence
NHS Prepares for Major Disruption as Resident Doctors Announce Four-Day Strike
Bank of England Expected to Hold Rates as Energy Costs Complicate Inflation Outlook
Britain Moves to Ban Under-16s From High-Risk Social Media Platforms and AI Chatbots
UK Economy Contracts as Middle East Conflict Weighs on Growth
Defence Secretary John Healey Resigns Over Military Spending Dispute With Treasury
Prime Minister Keir Starmer Faces Leadership Crisis After Senior Cabinet Resignations
NHS Trust Secures Funding for AI Tool to Detect Heart Failure Earlier
Government Unveils £4.5 Billion Investment Plan for Walking and Cycling Infrastructure
Nationwide Reports UK House Prices Falling as Borrowing Costs Remain Elevated
Centre for Social Justice Says Two Million Britons Are Using Illegal Loan Sharks
UK Carmakers Warn EU Local Content Rules Could Damage British Manufacturing
UK Government Imposes Emergency Ban on Seven Potent Synthetic Opioids
Royal Navy Completes Major North Atlantic Anti-Submarine Exercise Off Norway
NHS Figures Show Nearly 3,000 Patients a Day Receiving Care in Hospital Corridors
CBI Cuts UK Growth Forecast as Middle East Tensions Drive Inflation Risks Higher
Dan Jarvis Appointed UK Defence Secretary Following Major Government Reshuffle
University College London Study Links Physical Punishment to Higher Risk of Bullying
East Midlands Railway Unveils First Refurbished Train in £60 Million Modernization Programme
RNLI Issues National Water Safety Appeal Ahead of Expected Heatwave
Climate Change Raises Subsidence Risks for Millions of Homes Across Southeast England
Manchester Advances Plans for Underground Piccadilly Station With £1 Million Funding Commitment
Anti-Immigration Violence Continues in Belfast Amid Heightened Security Concerns
UK Law Locks Great British Railways Into Public Ownership
Office for National Statistics Adopts Supermarket Checkout Data for Inflation Measurement
Applied Atomics Launches With $500 Million Space Infrastructure Order Book
BYD Plans Nationwide Rollout of Ultra-Fast EV Charging Network
UK House Prices Unexpectedly Fall in May
CBI Warns UK Growth Is Becoming Increasingly Dependent on Public Spending
Makerfield By-Election Fuels Speculation Over Labour’s Future Leadership
Britain Declines to Join EU SAFE Defence Fund
UK Unveils 2040 Emissions Target Despite Strong Political Opposition
Government Orders Full Review of Palantir’s NHS Data Contract
UK Borrowing Costs Climb as Markets Price in Further Bank of England Rate Rises
Resident Doctors Confirm Five-Day NHS Strike Across England
Violent Anti-Immigrant Riots in Belfast Spark Political and Diplomatic Tensions
United Kingdom Sees Recovery in Horizon Europe Research Funding Share to 9.3 Percent
UK Inflation Holds at 2.8 Percent as Office for Budget Responsibility Flags Persistent Price Pressures
United Kingdom Launches National Anti-Fraud Framework to Combat Rising Pension Scam Losses
United Kingdom Expands Sanctions on Israeli Groups While Funding Palestinian Authority Salaries and Gaza Mine Clearance
United Kingdom Issues Three-Month Ultimatum to Major Technology Firms Over Child Online Safety Controls
United Kingdom Government Moves Toward Blanket Social Media Ban for Children Under Sixteen
Widespread Anti-Immigration Rioting Erupts Across Belfast After Knife Attack Linked to Asylum Seeker
Farmers Warn of Crop Losses Following Months of Unseasonal Rainfall
Civil Aviation Authority Launches Review of Regional Airport Operations
×