IP Global Director Alex Bellingham recently invested in, a modern refurbishment in the heart of South London’s Croydon. Originally hailing from the UK, Alex is currently based in Singapore where he has been working in property for the last seven years, prior to which he spent a decade in financial services.
We hear more about his extensive property investment experience, what he looks for in a potential target and why Croydon caught his attention.
Can you tell me about your previous investment experience?
It’s pretty extensive. I have probably brought property in ten or more jurisdictions globally over the years as well as a fair bit in the UK. As far as my investment portfolio goes, 95% of it is in property.
What are your objectives when investing in property?
When I first started investing in property, I was a bit younger and a bit braver – I was really trying to buy property for quick growth. As I have gotten older, it’s a lot more low risk, with a view to having a steady, reliable income as and when I want to retire.
What are the top factors you look at when investing in a development?
The first thing is that you’ve got to be able to afford it – it needs to be within budget. It’s also got to be in the currency that you want to invest in. Beyond that, what I am looking for is proximity to transport, proximity then to the employment centres, and how much is being spent to improve the area. I look at things like supply and demand too, and at vacancy rates, and I investigate the developer as well to get a sense of how reputable they are.
How did Fifteen Lansdowne and Croydon match up to those goals?
It was a very simple decision really – Fifteen Lansdowne met all my basic criteria. It’s very close to East Croydon station andwhich means it’s a good location – that’s obviously going to be a benefit. You only need to .
And it’s not a super large development – it’s a medium sized development, which is probably my preference as well. I think you can get lost in big schemes. Take a 300 unit development; if every unit is sold to investors you’ve then got 300 units to rent. In the Fifteen Lansdowne development a large proportion are owner-occupied which means that there are less properties coming to market to rent. And I think just personally I prefer to live in small to mid-sized developments as opposed to big ones.
The price is also a huge draw. If you compare Fifteen Lansdowne in terms of pricing to other buildings that are similar in type then it’s significantly cheaper too.
In comparison to your other investments, how has the process of investing in Croydon been?
Over the years, I have invested all over the world; from Qatar to Dubai, to Japan, Malaysia and Poland, and the UK. I think my best experiences, not necessarily my best performances, but my best experiences of buying have been in the UK, plus performance has been pretty good, and renting has been very straightforward. It’s the familiarity. That said, I’ve only exchanged so far on Croydon, but it’s been pretty straightforward. At this stage, it really depends on how good the lawyer is, and IP Global has tried and tested lawyers that we recommend and use frequently.
Is there any advice you would give to others thinking of investing in Croydon?
I think you need to step back a little bit and look at where and why you want to invest in London, specifically because I think sometimes people get their judgement coloured by what they think of an area.
If you think of Croydon 20 years ago, that might put you off buying.. Ultimately when you are buying property as an investment you are looking at two things –where it’s going in the future in terms of pricing and what’s going to make that happen, and secondly you want to make sure you can rent it to cover your costs. You also need to look at the price.
Ultimately you’ve got to look at it objectively and unemotionally. It’s all about what’s going to happen in the future. When a town is going to benefit from over GBP5 billion of private and public investment it means that fundamentally the area is going to improve over the period of the investment. That’s why I bought in Croydon, because I don’t see many other better opportunities in London at the moment on that basis.
Which other cities do you find interesting in terms of property investment?
I think Berlin is really interesting, but the UK broadly too is attractive at the moment, because of the post-Brexit story with lower interest rates, cheaper currency, tighter supply – as long as you are looking at decent cities where you can see rentability and a strong economic story.