View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
November 15, 2011

Knight Frank: London property prices to hit £10,000 per square foot

By Spear's

£10,000 per square foot – the price threshold expected to be reached by London’s residential developments by 2016, according to a report released today by Knight Frank

£10,000 per square foot – the price threshold expected to be reached by London’s residential developments by 2016, according to a report released today by Knight Frank.

The research, which sums up the sector over the past decade and looks to its immediate future, analysing the effect of One Hyde Park, the 86-apartment* Knightsbridge project, on development standards and buyer expectations, sheds new light on the direction the global super-prime development market is forecast to take.

Price performance – One Hyde Park

For the first time, actual price performance at One Hyde Park – the world’s most expensive residential development – has been released, with a full analysis in the report; this confirms how values grew during the development of the iconic scheme from £4,560/sq ft in 2006, to £7,500/sq ft in late 2011, in achieved residential sales to date of over £1.4 billion (62 apartments sold).

The report also provides an exclusive insight into the ‘value added’ elements of the development which have helped make it so attractive to purchasers – the link with the Mandarin Oriental brand and the levels of service this delivers; architecture by globally-recognised practice, Rogers Stirk Harbour + Partners; and award-winning interior design by Candy & Candy.   

Analysis of the sector suggests there is unlikely to be another residential development quite like One Hyde Park for some time – this is partly because of the lack of finance available for speculative residential schemes, and also because immediately-recognisable ‘super-prime’ locations like its Sloane Street/Hyde Park site become available only infrequently.

In the last decade, as the resale market was squeezed by increasing demand for a London home from the international newly-wealthy, new-build property began to fill the gap, and become a barometer of the city’s appeal to (U)HNWIs from Asia, the Middle East and CIS countries. Hotel-trained concierge teams, living spaces interior-designed using the best marbles, timber and technology, terraces and off-street parking – all these elements became expected in developments and helped drive prices of the best prime central schemes from £1,000/sq ft in 2000 to £2,000/sq ft in 2004, and up to £3,000/sq ft by 2006.

Content from our partners
How Flygreen is ascending into the future of private aviation
Stoneweg, Icona, and CBH Strengthen Partnership with Cromwell Acquisition, Adding €4 Billion AUM to Stoneweg
Why investors should consider investing in nature

Global comparisons

The super-prime development trend is now gathering speed in other centres for the world’s wealthy – New York, Monaco, Singapore, and Hong Kong – but only a handful of locations are approaching London’s benchmark.
Liam Bailey, Knight Frank Head of Residential Research, comments, “One Hyde Park’s success has been due to the fact that it was designed and executed to meet a very specific requirement from the new international wealthy. Not only did these buyers emerge from the recession almost unscathed, but so too in some ways did central London.

“In key markets like London the availability of top-end developments that attract wealthy international purchasers is still very limited. The opportunity for developers to capitalise on this market is therefore a real option.

“The problem is that the sites suitable for these developments are limited, and so too are the skills and knowledge required to deliver the right product. But get this combination right and the rewards can be significant.

“Bearing in mind the £1,000/sq ft jump to close to £8,000/sq ft in the 10 years to 2011, as well as the recent success of One Hyde Park and other super-prime apartment sales, I suspect this record will be broken even sooner – and that the very best developments will be sold with prices of £10,000/sq ft, sometime before 2016.”

*Planning permission was granted for 86 apartments, but the final number will be closer to 80 as some purchasers are choosing to merge apartments together.

Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network