London has a pipeline of luxury-home developments valued at about 21 billion pounds ($34 billion) as a shortage of properties helped push prices to a record and spurred new projects, according to EC Harris LLP.
Investors and developers plan to build 9,000 prime apartments and houses by the end of the decade that they’re aiming to sell for more than 1,000 pounds a square foot, according to a study released today by the London-based consulting firm. Of this amount, 4,000 units are scheduled to open in 2014 and 2015, EC Harris estimates.
Prices for prime residential properties in neighborhoods such as Chelsea, Mayfair and Kensington climbed to a record in June, real estate broker Knight Frank LLP estimates, as overseas buyers were attracted to London because of the weak pound and to find a haven for their wealth. Savills Plc, another broker, estimates that foreign buyers will spend 3.7 billion pounds buying prime residences in the British capital this year.
“London prime residential developers need to have a robust and realistic business plan,” said Mark Farmer, head of private residential consulting at EC Harris. Pitfalls include failing to ensure properties “will suit the unique requirements of an increasingly discerning future market.”
Among the new development projects are KOP Properties Pte. Ltd.’s revamp of 10 Trinity Square, which is opposite the Tower of London, and Richard Caring’s plans to convert the former U.S. Navy building on Grosvenor Square to luxury apartments.