New record property sale in London: a sheikh from the Gulf has paid a huge penthouse with incredible views across Hyde Park 100 million pounds, approximately 150 million euros.
The sheikh Hamad, Qatar’s foreign minister, will now have to wait almost two years before he can take up his 1,859 square metre residence, which is currently under construction.
The penthouse is located in a building designed by architect Richard Rogers, which has only just started to be built.
According to The Times, the penthouses bought by Hamad is the most expensive of the 86 apartments that will make up the glass and cement building ‘One Hyde Park’.
The building will have bullet-proof walls and will be connected to the five-star Mandarin Hotel via an underground tunnel to allow 36 members of staff available to the tenants of the 86 apartments.
Iqbal Latif – London
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Prices for “prime” homes in the most expensive streets of the capital have risen about 50 per cent in the past two years as a financial services’ boom has enriched bankers and other professionals in the City of London. Since the deal of the century, where new records were broken by the ‘Qataris’ to buy 1 Knightsbridge 4 Penthouses in March 2007 for 5000 pounds /sq ft, the prices in London have moved on to new highs. It was ease of liquidity that was said to be behind London real estate’s stratospheric rise of prices when it comes to real estate within the golden quadrangle ensconced quietly between embankments of Thames and as far as North circular road. In my opinion, ‘London the capital’ is insulated from global travails of capital crunch. It may hamper the pace of prices, but new highs that have recently been broken will be difficult to pull back. Capital has its own unique characteristics and is, in many ways, so dissociated from Paris and New York or any other city of the world. London, with its unique tolerance and forbearance and pluralistic culture, is a perfect haven for Arabs and others who look for a quiet place to park their capital. Children in Russia and India growing up in the fifties and sixties on Monopoly boards have emotional attachments to Park Lane and Mayfair. In absence of iPods and game boxes, the attachments of the present breed of new billionaires and mega rich class to London, like Abramovich or Mittal, is so unique.
Since the Qatari deal announcement, the stock value in London has gone up by 50% at least. What was the standard Mayfair rate of 900-1500£/sqft depending on the location and the quality is now selling at a premium of nearly 100 percent higher. A 4000 sq ft penthouse on Palace street with commanding views of Buckingham Place Garden is now going for 13.5 million £. It is feared that the fallout from the US sub prime mortgage meltdown will hit house prices in central London, one of the world’s hottest high-end property markets.
According to experts, the global credit crunch unleashed by the US sub prime collapse is threatening activity levels at banks in the City, and London property agents are warning that high-end residential prices could suffer as result. It is mostly believed that behind major deals in London are the fat bonuses of the bankers. Recent transactional history evidently shows that although fat bonuses account for most of the major residential deals, the mega residential properties that are breaking new highs like the ones of Qatari’s or Mittal’s are being bought by the ‘new prosperous moguls’ from Russia, India, and the Middle East. Global prosperity has led to huge increase of middle classes in Russia and India; this is associated with commodity boom and new pricing levels of the intellectual capital. Lukoil and Infosys are mega billion companies representative of new battalions of billionaires ready to spend millions in the world without borders. London property is now a statement announcing, “Here I arrive!” To own a property in London for new up and coming millionaires living in large English-speaking areas of the world is like arriving on the world scene and a kind of a fashion statement. Behind this lies the long standing colonial past and the extent of the English empire where it was claimed that the sun never really set. It is now called as flight of the ‘white’ from the Chelsea to the ‘Shires’ or ‘south of Thames.’ The old prime names of ‘Monopoly riches’ like Mayfair, Park Lane and Bond Street attract the premium values for these ‘new moguls ‘of the ex English empire.
In face of a downturn in City profits and employment levels, central London prices may fall but so will the interest rates, which will give some support to London prices. Any crisis or reverberations of security in the Middle East leads to the exodus of new mega rich to London. Last summer’s war in Lebanon led to hundreds of new discontented millionaires from Middle East lending into London for a peaceful abode.
According to FT, ‘the importance of the City to the economy was underlined as official figures showed business services contributed over half the economic growth in the second quarter of the year. There had long been a correlation between the health of the City and London residential prices. The prime London market suffered badly in 2002 and 2003 after prices of technology and telecommunications shares crashed.’
The internet bubble burst definitely deflated London but it had more to do with the lost of paper wealth than vanishing bonuses. The .com millionaires became paupers overnight that led to a severe decline in the market at the luxury end. But today, the market is supported by commodity rich billionaires and those who made their wealth in being a part of new higher pricing of the ‘intellectual capital.’ In year 2000 it was US and Europe alone at the centre of global economy; today, BRIC’s countries together have far greater reserves than Europe and US combined. In absence of finding a suitable home for these reserves in their own country, the capital will find its own ‘secure’ home, and there is no other better or perfect home for capital looking for security and growth than the London property market.
iqbal.latif@gmail.com
Iqbal Latif (Ike)- London