Aldar International's London Square to Build 9,000 Homes in UK Capital Over Five Years

London Square, a subsidiary of Abu Dhabi's Aldar Properties, has announced plans to deliver approximately 9,000 homes in London over the next five years, citing resilient demand in the UK capital. These new residences will be developed across roughly 30 sites, according to Scott Brown, chief financial officer of London Square. Of the total, over 3,600 homes will be designated for sale, 1,538 for build-to-rent, and an additional 3,575 will be offered in the affordable housing segment, which receives government assistance for buyers.

Since its founding in 2010, London Square has delivered 5,000 homes across 46 sites with a development value of £2.9 billion ($3.8 billion). Following its acquisition by Aldar in 2023, Mr. Brown stated that sales have improved compared to historical performance and are currently outperforming industry peers. He attributed this success to Aldar's involvement, which has facilitated both capital infusion and increased sales.

London Square specializes in regenerating former industrial sites and is known for projects such as the Nine Elms development, featuring over 750 residential homes and 21,500 square feet of commercial and retail space. The company is also redeveloping the former Surrey County Council headquarters into a premium 292-home project that includes restoring historical structures.

The company aims to complete 600 homes this year, an increase from 398 in the previous year, with a sales backlog projected to reach £1 billion by the end of 2026. Mr. Brown indicated that a significant portion of this year's construction, approximately 30%, will focus on the affordable market rather than the build-to-sell segment.

In the first half of this year, London Square reported sales of £251 million, a 236% year-on-year increase, driven by new projects including Bermondsey Phase 3, Wimbledon Bridge House, and Ransome’s Wharf. Naomi Minegishi, London Square's international sales director, noted that 10 to 15 percent of total international sales originate from the Middle East, with UAE buyers being the primary investors. Significant investment also comes from China, Singapore, and Turkey.

Ms. Minegishi highlighted that international demand is fueled by investment opportunities, the security of capital, and a robust legal framework. Additionally, families are seeking second homes for leisure or to support children studying in London.

Despite geopolitical uncertainties impacting inflation and higher borrowing costs leading to subdued demand and modest price growth of 0.4% annually to £529,720 in London's property market during the third quarter, fundamentals remain strong. Sharief Ibrahim, executive director and head of residential agency at CBRE, pointed to increased investment activity, London's lifestyle appeal, and its diverse population as supporting factors. He expressed optimism, citing numerous well-performing schemes within the London Square portfolio in terms of sales volume and value achieved.

Mr. Ibrahim described London as a resilient global city that has consistently attracted inward investment, even through economic downturns. The company projects home transaction volumes to be between 6,000 to 7,000 this year and 7,500 to 8,000 next year.