Abu Dhabi’s prescience looks set to be well rewarded with two of central London’s one-time luxury property hotspots on the rebound and set to become the capital’s top residential development areas this year, a new report says.
Hanover Square and Grosvenor Square in Mayfair, Westminster, are being restored to their former glory among London’s most desirable postcodes, the report by Wetherell estate agents said, citing analysis from Dataloft, EGI and Westminster City Council.
And Abu Dhabi was quick to see the potential, with the conversion of the former US naval HQ in Grosvenor Square into 37 luxury homes by the Abu Dhabi Investment Authority (ADIA) and Finchatton after a deal was inked in 2013 to buy 20 Grosvenor Square for more than £250 million (Dh1.15 billion).
It seems that was a wise investment.
“This year – 2017 – is the most significant year for Hanover Square and Grosvenor Square since their original development over 250 years ago,” said Peter Wetherell, the chief executive of Wetherell. “In both squares residential values could rise easily by an additional 5 per cent to 10 per cent above the overall Mayfair value increases we have been seeing over the past decade.”
Originally developed in 1713, Hanover Square was once lined with grand townhouses until the 1850s, home to many aristocratic families. Likewise, Grosvenor Square, originally developed in 1721, was lined with grand mansions up until the 1890s.
After the 1850s, Hanover Square went into slow decline, the houses converted into lodgings, and then transformed into offices from 1945 onwards. Grosvenor Square was converted into apartment buildings between the 1890s and 1920s, with the square hosting various Embassy buildings, government premises and offices after 1945.
Today there are almost 150 new or refurbished luxury apartments and penthouses either recently developed or under construction in both squares. The report calculated that these new homes can command values of £3,500 per square foot to more than £5,000, with resales achieving up to £4,638 per sq ft. These new homes sit alongside other as yet unmodernised apartments in the squares, which typically sell for £2,400 per sq ft.
Wetherell said Grosvenor Square has 90 new homes including the ADIA property and One Grosvenor Square (a scheme of 44 homes by Lodha). The remaining properties consist of newly refurbished apartments developed by niche luxury developers including Rigby & Rigby and Aion.
Hanover Square has about 50 new homes. Of these 41 are located at 22 Hanover Square, a development by Indiabulls Real Estate, with the balance consisting of individual recently refurbished flats.
This year will see the relocation of the American Embassy at 30 Grosvenor Square to Nine Elms, and the conversion of the 1960s embassy building into a new luxury hotel and serviced residences.
At the other end of Grosvenor Square on the site occupied between 1960-2014 by the Canadian High Commission will be the new Lodha apartment scheme.
Hanover Square is undergoing similar transformation. The landowner Great Portland Estates is creating a large new central public realm – 15 metres by 45 metres – with a new main entrance for Bond Street Undergound and Cross Rail Station at 18-19 Hanover Square.
Although prime central prices have recently declined, over the past decade, Mayfair residential values have risen by 188 per cent.
Office premises and developments in Mayfair have dwindled; replaced by new residential projects. There has been a gain of 500,000 sq ft of residential space and an almost equal loss of office space.
The regeneration of Hanover and Grosvenor Squares is being driven by ulta-high-net-worth investor-developers from the Middle East and India and from the GCC, Qatari Diar and ADIA.
Mr Wetherell said the rebirth of the squares coincides with what will be the removal of some of the city’s ugliest eyesores.
“This year will see the end of most of the Bond Street and Crossrail restructuring in Hanover Square and the removal of the US Embassy security cordon in Grosvenor Square,” he said.
“In their place will be large public realms and new luxury homes, alongside new leisure facilities such as hotels and/or restaurants.”
Many Londoners, not to mention ADIA, will be delighted at the return to grandeur of these two faded stars.
chnelson@thenational.ae
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