German Buyer Goes on London Real Estate Spree

The German real estate company Grand City Properties S.A. saw something in the London panorama: an investment lucrative enough, and priced well enough, to defy the more pessimistic forecasts about the looming impact of Brexit. Grand City, the fourth-largest residential company in Germany, had never bought London property before. But in recent months, it has quietly picked up the 117 apartments that remained unsold in the 159-unit Hill House, part of a little-noticed buying spree that has so far netted more than 800 apartments and could reach twice that number. A property market that is waiting nervously for some clarity about how it will be affected by Britain’s scheduled departure from the European Union in March would normally be relieved, or even delighted, by this seeming vote of confidence from such a powerful buyer, a company that owns and rents 86,000 homes in Germany. But the most intriguing aspect of this first big London shopping spree by any major German residential property company, and one that will worry current homeowners, is the heavy discounts that Grand City says it was able to secure while other units in the same projects remained for sale at higher prices. The discounts achieved by the Germans indicate that true London prices may be much softer than those publicly advertised, suggesting that even a smooth Brexit transition will do little to lift London real estate prices anytime soon.