Prices at the world's most expensive residential development - part owned by a company of Qatar's prime minister - could hit £10,000 ($15,864)/ sq ft by 2016, a new report said on Tuesday.
One Hyde Park, a development of 86 super prime residential apartments and three retail units in Knightsbridge, London, currently sells at £7,500/ sq ft, up nearly £3,000 since its launch in 2006, Knight Frank said.
The exclusive project, owned by Project Grande (Guernsey) Limited - a joint venture consortium which includes Waterknights (owned by Qatar Prime Minister Sheikh Hamad bin Jassim bin Jabr Al-Thani, has so far generated £1.4bn worth of sales with 62 apartments sold, Knight Frank added.
Luxury home prices in central London have soared 40 percent since March as wealthy overseas buyers, including many from the Middle East, seek a haven from political unrest and the sovereign debt crisis.
Values of houses and apartments costing an average of £3.7m ($5.9m) rose by an average of 12.5 percent in October from a year earlier, Knight Frank said earlier this month.
Its new report said there was unlikely to be another residential development 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," the report added.
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 the super rich 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.
Knight Frank said 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, said: “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."
He added: “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.”
London property has long been seen as a safe haven for investment for wealthy GCC investors. Real estate consultancy Savills in June said MENA homeowners hold 13 percent of London’s most expensive property by value with an average spend of £4m.
Harrods Estates, the property arm of the Qatar-owned department store, in August said a Middle Eastern businessman had signed a lease to rent London’s most expensive property at a cost of £55,000 ($90,000) a week.
The company said it had seen the average cost of its rented property increase to £4,285 from March to date compared to £1,955 the same period the previous year.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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