London Square, which is part of Abu Dhabi’s Aldar Properties, plans to deliver about 9,000 homes in the next five years in the UK capital, as demand remains resilient.
The new homes will be built across about 30 sites, said Scott Brown, chief financial officer of London Square.
More than 3,600 will be for sale, 1,538 will be for build-to-rent and another 3,575 will be sold in the so-called affordable segment, in which government support helps people to buy a home, he said during a presentation.
The company, which was acquired by Aldar in 2023, has delivered 5,000 homes across 46 sites with a development value of £2.9 billion ($3.8 billion) since London Square was founded in 2010.
“Under the Aldar banner, our sales have actually been better than they were historically and in the current market have been outperforming all of our peers,” Mr Brown said. “Through our involvement with Aldar, we've not only been able to drive the capital but we've also been able to drive our sales.”
London Square, which works on regenerating former industrial sites, is behind projects such as the Nine Elms development, which features more than 750 residential homes and 21,500 square feet of commercial and retail space.
It is also transforming the former headquarters of Surrey County Council into a premium 292-home development, which includes the restoration of old structures.
The company aims to complete 600 homes this year, up from 398 last year, with sales backlog to reach £1 billion by the end of 2026.
“Most of this year will be on the affordable market rather than the build-to-sell market … about 30 per cent of what we're building is affordable,” Mr Brown told The National in London. He did not provide details on the total sales the company expects this year.
London Square reported sales of £251 million for the first half of this year, up 236 per cent year-on-year on the back of three new projects – Bermondsey Phase 3, Wimbledon Bridge House and Ransome’s Wharf.
Sales from the Middle East account for 10 to 15 per cent of total international sales, with UAE buyers dominating sales activity, says Naomi Minegishi, London Square international sales director.
Customers from China, Singapore and Turkey are also major investors in London’s property sector.
“International demand is being driven by investment opportunity, safe haven of their capital and a strong legal framework,” Ms Minegishi said. “Families also want to have a second home to spend time in summer, as well as to have a home to support their children as they enrol them in school or universities to study in London.”
London's property market has been affected by geopolitical uncertainty that is pushing inflation higher.
In the third quarter, the average home price in London grew modestly by 0.4 per cent annually to £529,720, as demand remained subdued amid higher borrowing costs, according to the Nationwide Building Society.
However, fundamentals remain strong on higher investment activity, lifestyle vibrancy and a diverse population, said Sharief Ibrahim, executive director and head of residential agency at CBRE.
“There is real cause for optimism. There are countless examples of schemes that are performing really well, many in the London Square portfolio in terms of the volume of apartments being sold and the value being achieved,” he said.
“London is a resilient place. It's been through economic downturns, shocks to the economy and the system and the appeal of London has endured throughout that period. It's a global powerhouse and one of the, if not the most, successful city in terms of inward investment globally.”
It projects home transaction volumes to be around 6,000 to 7,000 this year and 7,500 to 8,000 next year.