Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

London's biggest landowner calls time on luxury property bubble

1 Comment
London's biggest landowner calls time on luxury property bubble

The Duke of Westminster - London’s biggest property owner – has called time on the capital’s luxury housing market, selling down £240 million in top-end property to re-invest in affordable housing.

His property development business, Grosvenor Group, sold a large chunk of its Kensington and Belgravia portfolio last year, including a 19th century terrace of Belgravia homes for £115 million.

Group chief executive Mark Preston has previously voiced unease about the scale of price inflation at the top end of the London property market, describing it as ‘unsustainable’.

At the end of last year prime estate agency Savills warned that a massive expansion in the amount of luxury floor-space being constructed south of the river would test the limit of overseas demand.

‘There is a potential oversupply of homes priced between £1,000-£2,000 per square foot,’ said Savills London property development specialist Katy Warrick. According to asset manager London Central Portfolio, prime residential property in the capital has appreciated 60% since the credit crunch.

Sales by the privately-owned Grosvenor group increased revenue profit by more than 100% from £84.6 million to £175 million. The Duke of Westminster had previously been estimated to own around 300 acres of land in Mayfair and Belgravia.

‘I'm more concerned about it [high-end residential pricing] than I was last year,’ said Preston as the company released its annual results. ‘[It is] a very much a deliberate initiative on our part to capitalise on prices that we think are high.’

Anecdotally, overseas buyers, who accounted for more than 20% of prime residential sales in 2012/13 according to Savills, have shown little sign of slowing down.  

Property consultant JLL told the FT earlier this week that it had seen a marked increase in Russian and Ukrainian buyers seeking safety in London property values. 

Russian nationals spent more than £180 million on London property last year according to Savills data, with the fear of sanctions reducing the ease of capital movement adding further impetus.

Tax changes to residential property held in overseas-registered companies announced in this year’s Budget had so far not reduced their popularity, added agents  

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Play Europe bulls, a retail boost and why a little inequality can be a good thing

Europe bulls, a retail boost and why a little inequality can be a good thing

This week’s Investment Pulse looks at whether investors should be bullish on Europe, the surprise rise in UK retail sales and if a little inequality is a good thing.

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter