Gulf helps Mayfair regain London property top spot

Knightsbridge, top of the prime central London market for a decade, has been overtaken by Mayfair. Luxury homes attract investors fearing global recession. (Getty Images)

• It is the first time in a decade Mayfair property has been significantly more expensive than Knightsbridge.
• Sales volumes in Mayfair increased by 18 percent in 2017 on the previous year.

LONDON: Mayfair luxury apartments were priced on average at £2,378 per square foot last year, six percent higher than those in Knightsbridge, according to a report commissioned by London-based estate agency Wetherell.
It is the first time in a decade Mayfair property has been significantly more expensive than Knightsbridge, the report said.
Sales volumes in Mayfair increased by 18 percent in 2017 on the previous year, bringing an end to a 52 percent decline in sales between 2013 and 2016, the research said.
Ultra-prime apartments in Mayfair can be valued in excess of £7,000 per square foot.
Rents also soared last year, with the highest luxury apartment rent now averaging £2,026 per week, which is 17 percent higher than Knightsbridge.
“Mayfair’s back,” Peter Wetherell, founder and chief executive at Wetherell, told Arab News, saying that investors from the Middle East as well as from the Far East and the UK itself are looking at investment opportunities in the increasingly desirable prime London location.
There are 15 new residential projects in Mayfair, which are expected to deliver 501 super-luxury residences over the next five years. Approximately 15 percent of these developments have been completed.
One such project is the ‘20 Grosvenor Square’ development where Abu Dhabi Investment Authority and the UK luxury design company Fichatton are converting the former US Naval HQ into 37 luxury homes.
For the past decade, Knightsbridge dominated the prime central London market, thanks in part to the opening of One Hyde Park in 2007. The residential and retail development is next to the London park and has the luxury department store Harrods on its doorstep.
The area’s appeal started to diminish, due in part to the lack of new luxury mega-developments in the last 10 years, the research suggested.
“The right developments are being built in Mayfair. All hotels have been revived in the last 10 years, the offices are some of the most expensive in the world. Within a few streets you can walk to some of the world’s leading retail brands,” said Wetherell.
“It is not that Knightsbridge has a problem — it is that Mayfair has a very exciting future,” he said.
Mayfair was a historically residential neighborhood until the second half of the 20th century when many homes were turned into offices and planning priority was given to commercial buildings.
This is now changing, said Wetherell. “People looked at these buildings and a lot of them 1940’s/50’s buildings — which are commercial, and thought actually these are worth more as residential,” he said. Currently Mayfair has more than 4,360 residential addresses, while Knightsbridge has just 2,500 addresses.
There have been doubts among the strength of Arab investment in prime London real estate following the decline of oil prices in recent years and the credit crunch in the Gulf.
A lack of international appetite has been seen as partly responsible for damping overall average apartment prices in prime central London. Average values fell to £1,655 per square foot in 2017 from £1,704 per square foot recorded in 2016.
Wetherell said the capital’s luxury market will continue to appeal to Middle East investors. “We’ve always been a magnet,” he said.
“There is money going into prime central London ... it is still an exciting story. When you travel around prime central London at the moment, there are cranes everywhere and there is great residential stock being built. A lot of the money is Middle Eastern and Far Eastern,” said Wetherell.
Research from Knight Frank points to strong Middle East appetite for high-end property investments and the UK.
The Middle East tops the rankings in terms of the proportion of ultra-high-net-worth individuals who are planning on buying a new home in 2018, according to the research published by the property consultancy on Tuesday.
Ultra-wealthy people from the region own an average of four homes, compared to Russians’ 3.5 homes, and Europe where the super rich own 2.7 homes on average.
The UK is also still the preferred destination for Middle East property investors, the research said, ahead of the UAE, the US, France and Turkey.