London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

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
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×