Singapore-Owned Strawberry Star Group Secures £260 Million Mixed-Use Development in London
London-based residential developer and property services company Strawberry Star Group recently inked contracts to secure a major residential-led mixed-use development project in Luton in Bedfordshire, London. The £260 million development on a 6.9-acre (approximately 28,000 sq m) site close to Luton Airport will deliver 685 homes together with a 200-bedroom hotel, retail and leisure facilities, a state-of-the-art medical and wellness centre and high quality public realm. Work on the development, which has full planning consent, will begin in the Autumn this year, with phase one to be completed by the second half of 2021.
Strawberry Star Group’s latest development in Luton will be built by its newly-created division Strawberry Star Homes using a mix of traditional and novel construction technologies, including elements of modular homes, to deliver homes at lower capital values for first-time buyers. The starting price for the apartments will be £210,000.
House prices in Luton increased in 2016 by more than 19 per cent and are predicted to continue to rise. Rental returns are also above the national average, standing at 4.81%. And with Luton receiving a £1.5 billion investment, the house prices are set to rise by 41 per cent in the next five years.
Santhosh Gowda, Chairman, Strawberry Star Group said, “The Luton development is a major investment for us and takes us one step closer to delivering quality homes at lower capital values for aspiring first-time home-buyers living and working in and around London.”
“Luton is an obvious choice for this Strawberry Star Homes scheme. The city offers first class infrastructure, with high speed travel into Central London, easy access to key the M1, M6 and M25 motorways, and, of course, Luton Airport.”
Strawberry Star Homes will shortly announce an alliance with a leading construction firm and architects to bring forward its vision of building homes at lower capital values for first-time buyers.
Listing of Innovative Investment Structure on TISE
Separately, Strawberry Star Group also announced the successful listing of its innovative investment structure on The International Stock Exchange (TISE) in Guernsey to raise £150 million equity in 2018 from global investors to tap the dynamic London housing market.
The investment structure—Strawberry Star Real Estate PCC Ltd—currently holds £40 million equity and is on track to increase to £150 million by end of 2018 with a target of £500 million equity by end 2020. Most of this equity will be deployed in developing housing schemes around London where the gap between demand and supply is widening, creating business opportunities, especially with the sterling yet to regain its strength.
Gowda said: “We are delighted with the business prospects in the London real estate market. We have set up this unique investment structure to take advantage of the market conditions. We opted to list this investment structure on TISE because of several advantages, such as, regulatory oversight, added credibility, and higher compliance and governance.”
“Further, this investment structure will continue to help us raise capital from international investors. We see an increasing interest level among Asian investors, especially from Singapore, to gain a foothold in the expanding London property market, which has been delivering consistent returns because of its strong fundamentals,” he added.
Strawberry Star has a 11-year track record in delivering and managing homes across London, including Hoola at Royal Docks, Sky Gardens at Nine Elms, and the upcoming Bronze in Wandsworth and Greenview Court in Southall. Asian investors had a significant participation in bringing Hoola and Sky Gardens to the market with investments from Singapore and Hong Kong accounting for 80 per cent of the two schemes.
“With the sterling still trading low, we expect more Asian investment into the London residential market, as we widen the scope for participation of more global investors this year. The funds will be deployed on homes that benefit from the Cross-rail and easy access & transportation links to Central London and business hubs. We intend to create a pipeline of 3,000 residential units over the next 5 years and the innovative investment structure will gain significance,” Gowda said.
Keen Interest in London Real Estate Market from Singapore-based Investors
Singapore is a critical market for the Strawberry Star Group, which maintains a full-fledged office in the island nation offering its entire spectrum of services. In addition to securing investments from the Asian region for London schemes, the Singapore office offers bespoke real estate services for home-buyers, landlords, and buy-to-let investors.
“The Capital division in Singapore identifies investment opportunities in the London real estate market for Singapore-based investors. The Capital division works with its London counterpart to secure interests of early-stage investors from Singapore in various London schemes, thereby making them integral to our growth plans with a safe exit plan,” said Tracy Wun, Director, Strawberry Star Capital (S) Pte Ltd, Singapore.