General

Africans spend £4m weekly on London property, report reveals

October 27, 2014 4:41 pm

Wealthy Africans spend as much as £4 million a week on London’s property, a new report by estate agents revealed. The report also disclosed that buyers are mostly from Nigeria, Ghana, Congo ,Gabon, Cameroon and Senegal.

In the past three years, more than £600 million has been spent in London’s property market, with African buyers accounting for 1.5 per cent of transactions in the ‘ultra prime’ London market, and up to five per cent of sales by value – up from two per cent. This is by typically spending between £15 million and £25 million on each home.

The recent Ebola epidemic and continued terrorism from groups such as Boko Haram has resulted in an increase in buyers in recent months,
Beauchamp Estates, which sells some of London’s most expensive homes, said in its report, released on Monday.

“Nigerians are the biggest spenders, with wealthy nationals investing £250 million on London homes in the last three years,” it said.

The new wave of super-rich includes Aliko Dangote, a Nigerian business magnate who, with a £16 billion fortune, is Africa’s wealthiest man.

Folorunsho Alakija, a billionaire oil tycoon, fashion designer and philanthropist from Lagos, is also a big investor in the London property market. She recently bought four apartments in One Hyde Park, the super-exclusive development in Knightsbridge.

Her British-born nephew Rotimi Alakija, who also goes by the stage name of DJ Xclusive, has also invested property in the capital.

It is thought that other tycoons have also been eyeing up homes on Kensington Palace Gardens – known as Billionaires’ Row, the report stated

Gary Hersham, managing director of Beauchamp Estates, revealed that three super-rich Nigerians have enquired about homes in the past week alone. This is despite the average person in Nigeria earning just £850 per year.

“I’ve had an upturn in African buyers over the last few months,” he said.

“The situation in West Africa at present is pushing rich African buyers back into Central London at a significantly higher level than is normally experienced.

“While war, disease and terrorism in West Africa grab media headlines, actually for super-rich Africans, its domestic wealth, cultural ties to London, general safety and education for their children are the key attractions for buying a home in central London.”

Hersham said these super-rich look to buy property in the ‘platinum triangle’, which is made up of Mayfair, Belgravia and Knightsbridge.

“Around 80 per cent, spend between £15million to £25million on a residential property, with 10 per cent spending more than £30million,” he said.

If they are not buying, they are renting luxury homes for up to £15,000-per-week and staying for between six weeks and three months per year.”

London’s reputation for having a residential property market, which is secure and a stable investment, is one of the main reasons wealthy Africans are buying, according to Beauchamp Estates.

Another reason for investing in the property market is the historic cultural and community ties Nigeria has as a commonwealth country and there is a community of 70,000 in London.

Education is also a factor. According to the Nigerian embassy, Nigerian nationals spend more than £300 million a year on tutoring, accommodation, fees and equipment at British schools and universities.

“At present, virtually all the transactions are for end use, not rental investment, which indicates that the African buyer market in London has significant room for growth and maturity.”

Nigerians have been longstanding property purchasers in the central London market, going back to the early 1980s.

In the 1980s and 1990s, Nigerians purchased houses in North London, in Hampstead, St Johns Wood and Primrose Hill.

“Now, enhanced wealth has enabled them to move into the ultra prime market in Mayfair, Belgravia and Knightsbridge, and have been joined by affluent purchasers from other West African and French equatorial states,” Hersham noted.