A few days ago, Adar Poonawalla, CEO of Serum Institute of India that manufactures the Covishield vaccine, reportedly closed a deal to buy London’s most expensive house of the year worth approximately ₹1446 crore. He agreed to pay the amount for a 25,000 square foot Mayfair mansion, Aberconway House which is a 1920s home near Hyde Park. Besides Poonawalla, there are several UHNIs who have made the city of London their home.
Indian UHNIs have been investing in properties overseas including in London, especially in prime central London areas such as Mayfair, Baker Street and Marylebone among others.
They are investing in properties in London as it is seen as a gateway destination, on account of business opportunities overseas, lifestyle, investment diversification and enhanced quality of education as well as life for their next generation.
Why is the UK a preferred real estate destination for Indians?
Indians, specially UHNIs are among the highest number of buyers who are investing in marquee properties in London. A Knight Frank Attitude Survey said that high net-worth individuals when asked in which countries or territories are they most likely to invest in property, as many as 47% UHNIs from India said that they would want to purchase a property in the United Kingdom, 41% in UAE and 29% in the US.
Real estate was the top cited opportunity for its attributes as an inflation hedge or due to the benefits of diversification. Many UHNIs see real estate as an opportunity to secure enhanced return profiles, a key advantage. Plus, when investing directly, real estate enables greater control and value-add opportunities.
As per the Survey, one in ten respondents specifically cited looking for attractive valuations and distressed opportunities. Property is a passion for many UHNIs and will remain so, however, decisions are typically driven not only by returns, but sentiment and need. Whether looking for family use or a specialist asset that drives diversification and yield across a broader range of investments, UHNI clients like the idea of combining passion with practicalities.
Why are Indians buying properties in London?
London is a financial and educational centre as well as an important global gateway for investors.
A marquee bungalow deal in Mumbai that can be compared with the London (Poonawala) transaction, especially in terms of price, is the purchase of an independent house in Mumbai’s posh Malabar Hill for ₹1001 crore by Radhakrishna Damani and his brother Gopikishan Damani in 2021, said real estate experts.
For most HNIs, buying property marquee properties in London, Manhattan or Mumbai is more of a prestige issue than anything else, said Ritesh Mehta, senior director and head – West and North, Residential Services and Developer Initiatives at JLL.
“Many Indians own estates, marquee properties in the heart of London. The city offers Indian UHNIs a certain quality of life, a lifestyle for themselves and the next generation, great connectivity to other global cities, a strong currency and a certain comfort factor considering that several Indians are settled there,” Ashwin Chadha, CEO, India Sotheby’s International Realty, told Hindustan Times Digital.
Data shared by Cushman & Wakefield indicates that over the years there has been a steady increase in Indians investing in foreign real estate. The investment size has grown from $58.7 mn in FY 14 to $188.73 in FY 23, which is a CAGR growth of 14%.
“While often the reasons are diversification of financial portfolios and lucrative real estate valuations, for the UK we believe the reasons are far more culturally nuanced. HNIs exploring the UK as an investment destination often have great cultural comfort and familiarity with the place. Beyond diversification, triggers for investment in residential housing could vary from access to quality living and healthcare, family connections and educational opportunities for children,” said Anshul Jain, Managing Director, India & Southeast Asia and Head of APAC Tenant Representation, Cushman & Wakefield.
The UK economy is going through a weak phase, so it could be seen as a good opportunistic buy – though for the ultra high end, there is less downward variance, he told Hindustan Times Digital.