Fancy living in an old Scotland Yard building?

The Broadway, will take the form of six towers and is located in the heart of Westminster.

Abu Dhabi investors have taken a fancy for Scotland Yard buildings, if recent transactions are anything to go by. After the hypermarkets operator LuLu Group International acquired the Great Scotland Yard, the original headquarters of Metropolitan Police in London, in 2015 to convert it into a hotel, it is now the turn of the Abu Dhabi Financial Group (ADFG) to redevelop an old Scotland Yard building in prime central London.

The project is being built by Northacre, an upscale developer ADFG acquired in 2013. The development, titled The Broadway, will take the form of six towers and is located in the heart of Westminster. It will offer views of the Houses of Parliament, Westminster Abbey, Big Ben, Buckingham Palace, the London Eye and St James Park. It is slated to be complete in 2021. Sales were launched in the UAE this week.

The developer also launched sales of the 268 residential units in Shanghai, Beijing, Hong Kong and Singapore last week. Prices average £3,000 a square foot.

The London luxury real estate market has continued to attract significant Middle East investment. Nearly half a billion pounds was invested into London from the region in 2016.

"The Broadway will be a golden postcode in central London. Westminster has the highest potential for capital growth in central London. Experts predict 32 per cent growth in capital value till 2020," says Niccolo Barattieri di San Pietro, CEO of Northacre.

The project is fully funded and Northacre will not depend on pre-sales for construction. The project offers a 30:70 payment plan, with the funds going to an escrow account. ADFG has secured a £700 million loan from First Abu Dhabi Bank to finance development.

The gross development value of The Broadway is approximately £1.5 billion, said Jassim Alseddiqi, managing director and CEO of ADFG. The group owns 40 per cent of the project while the remaining 60 per cent is owned by ADFG investors, which also includes a regional sovereign wealth fund.
The Scotland Yard building has been demolished and basement works are in progress. The first major construction contract is expected to be issued by April 2018.

"There haven't been many good entry points for investors in central London in the last 20 years. Because the market is sluggish, probably now is the right time to buy in London," said di San Pietro.

London residential prices are 30 per cent cheaper today for investors from dollar-denominated markets compared to the peak in 2014. This includes a 10 per cent price decline since mid-2014 and 20 per cent from currency benefits for overseas investors following the pound's decline after Brexit.

Referring to the impact of Brexit on sentiment, Alseddiqi said: "We believe in the strength of the London economy and see it strictly from a long-term perspective. London has good prospects for capital growth from a risk-reward perspective in the long term."

- deepthi@khaleejtimes.com

Deepthi Nair

deepthi@khaleejtimes.com