Grosvenor Estates sells off prime London property over market fears
Tuesday 29 April 2014
Fears over an overheating market have led the historic owner of swathes of Mayfair and Belgravia has sold off hundreds of millions of pounds worth of “super prime” property in London.
Grosvenor Estates is controlled by the Duke of Westminster, worth an estimated £7.8 billion and one of the UK’s richest men.
His company posted a third successive year of record profits in 2013 as it took advantage of surging prices to sell off £240 million of super-prime developments — typically defined as homes with an asking price of at least £5 million. Profits from its UK & Ireland arm more than trebled as a result to £117.5 million.
Chief executive Mark Preston insisted the company was “not calling the top of the market”. But he added: “It’s certainly true that part of the reason for making the sales we did last year was because we had a concern about the level of pricing and its sustainability, and the extent to which it was going to continue… Inevitably one has a concern over what happens next.”
The move follows recent research from agents Knight Frank which showed overseas demand pushing up London’s luxury home prices 68% since 2009 compared with a 49% rise across greater London measured by lender Nationwide.
Tom Bill, Knight Frank’s head of London residential research, said: “Prime property in central London is now growing at 7.5% a year, slower than across the rest of the country.”
Other threats which are looming for London include a strengthening sterling — which is making the capital a less attractive place for foreign investors to park their money — and a possible “mansion tax” on expensive properties after the next election, a policy supported by Labour and the Liberal Democrats.
Grosvenor’s sell-offs included 11-15 Grosvenor Crescent, which it sold in December last year for £114 million to private developer Wainbridge. The company pumped sale proceeds into rental schemes in more affordable areas of London such as Bermondsey. Preston added: “The picture for us looked increasingly risky. One of the things that should concern us all in London is the lack of supply of residential that can meet the needs of people who want to live and work in central London and cannot afford or choose not to put most or all of their savings into a house. That is something of a concern which does need addressing.”
The company traces its history back to 1677, when the present Duke’s ancestor, Sir Thomas Grosvenor, married Mary Davies, who had inherited 500 acres of land north of the Thames to the west of the City of London.
The Grosvenors developed the northern part — now known as Mayfair — in the 1720s before moving south to Belgravia.
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