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Belgravia - Cosmopolitan cachet
Belgravia - Cosmopolitan cachet

Published FT April 3 2010
In the competing high-end neighbourhoods of central London it is said that Mayfair has the hedge funds, St James has the discretion and Belgravia has the social scene. The latter is among the most expensive residential areas in the world and so naturally attracts international super-wealthy buyers keen to quote their postcode.

Built for the English aristocracy in the 19th century, it has successively attracted European, Middle Eastern, Indian, Russian and central Asian investors. Billionaire investor Joseph Lau recently bought a property in the area for £32m and other Chinese tycoons seem likely to follow. The global wealthy tend to congregate and like their English houses to have a classic feel. They like Belgravia’s elegant, wide boulevards, stucco-fronted terraces and the air of exclusivity inherent in an area created in the 1820s by Thomas Cubitt out of boggy farmland owned by Sir Robert Grosvenor, who named it after his second title, Viscount Belgrave. A statue in his honour in Belgrave Square sports a quotation from art critic and social thinker John Ruskin – “When we build, let us think that we build for ever” – but although some of the buildings have been demolished and replaced, the area’s desirability has sustained, not least because of its location. Centred on the 10-acre square, Belgravia borders Knightsbridge and Hyde Park to the north-west, the gardens of Buckingham Palace to the east, Sloane Square and Chelsea to the south-west, and Victoria and Pimlico to the south-east.

Property company Grosvenor still owns the majority of the buildings – the estate has been diluted through the sale of freeholds – and its management does much to give this part of London its character and flavour. It employs 27 caretakers, for example, for Eaton Square , as well as teams carrying out rolling maintenance and upgrades; the company’s freeholding has enabled it to sink a borehole and heat three apartment blocks with the resulting ground source heat pump; and it takes an active interest in the retail mix on its three “high streets” – Motcomb Street, Elizabeth Street and Pimlico Road – aiming to create a balance of independent traders and renowned eateries, including nine Michelin-starred restaurants.

Inevitably, all of this gracious living comes at a high price. “If you want somewhere for under £1,000 per sq ft you’ll have to go to Pimlico,” says estate agent Andrew Reeves as he flicks through his list of properties for sale.

It might be expensive but there is still plenty of choice: apartments available include traditional townhouse-to-maisonette conversions, a smattering of new-build infill and some grander, lateral redevelopments around Eaton Square.

“The aristocracy’s reduced circumstances after two world wars meant the appetite for large, expensive-to-run, London townhouses was weak and a plan to convert the large houses into lateral apartments was carried out,” says John Clark, residential investment director at Grosvenor. Behind Eaton Square’s classical tall, skinny façades lurk modernised apartments that extend across four houses. Out of 380 properties, only 12 houses remain and 60 per cent of the apartments on the square are held on leases of less than 20 years. “Grosvenor introduced 20-year leases in the 1960s,” explains the company’s Giles Clarke. “We wanted to fill the gap between rental and long-term hold. They have proved very popular and provide access to a better cross-section of residents, as some of the people on the way to becoming successful can now afford to buy.” As well as a mix of lease-lengths, there is a variety of accommodation types. “There are some tiny one-bedroom cottages and plenty of mews houses but then you get the different grades and sizes of townhouse,” says Johnathan Hewlett of estate agency Savills, which sold three residences in Eaton Square last year. “Hugh House, at 15,000 sq ft, had been offices in the early 1990s when it was acquired by a developer. Since then it has been owned by an American hedge fund manager; Lily Safra, widow of Edmond Safra, the billionaire banker; a Russian; and now a European.” The price achieved in early 2009 is estimated at £33m. In Belgrave Square the larger houses – including basements linking the mews to the main house – amount to about 21,000 sq ft and fetch £60m plus.

Elizabeth Street

And there has been strong demand in this super-prime category. “Weak sterling has been the real driver,” says Stuart Bailey of estate agency Knight Frank. “About 65 per cent of our sales have been to international buyers, with a lot of interest from Italians. There was a nine-month lull, post-Lehman Brothers’ collapse, when there were no sales over £10m. The next nine months saw 10 sales over that price. Sellers call us up and say ‘I’m looking for a buyer but you can’t tell anyone about it’. And some buyers only want to buy houses that no one else has viewed.” Apparently this avoids the dinner party embarrassment of inviting a guest who says: ‘Yes. I looked at this and didn’t like it’.”

Such demanding purchasers might resort to the services of a property search agent such as Property Vision’s James Geddes, who has been working in the £5m-plus market for five years. “We’re dealing with clients who have particular requirements. It could be traffic flow, sunlight, internal layout, servants’ accommodation, lifts or underground parking. Also things like what level of security they require,” he explains. “At the top end, the circle [of possible sellers] is very small; they may trade on a whim, if it is one of many houses they own around the world. Gone are the days of asset-rich cash-poor Brits owning. These days these are international owners who are asset and cash-rich.”

Also serving these buyer needs are the developers that take on the task of modernising. Candy and Candy have styled the apartments for sale in a Foster and Partners-designed block in Chesham Place. An 8,000 sq ft maisonette is on the market for £39,250,000 through Savills. “These are very exceptional apartments done with a great deal of style and flair,” says Hewlett. “Buyers want the very latest systems installed. They have it in their yacht, they have it in their private jet and they want it in their homes.” Other developers follow suit but add their own signature styles. Tim Fulstow has just completed a mews refurbishment on Eaton Mews South. “We like to leave something in the building that we think will be there for a while. You’ve got to show the quality.” In this case it is a hand-wrought iron staircase with leaf design by Heather Burrell.

Other design details in what he calls a “classic but contemporary” style include mother of pearl inlay in the wooden doors and a frieze by artist Kathy Dalwood across the front façade. These are the kinds of features Knight Frank hopes will persuade someone to pay £6.95m for a London pied-à-terre.

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Copyright Financial Times 2010


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