The chief executive of Northacre, the developer behind the mixed-use scheme on the former site of New Scotland Yard, SW1, has dismissed reports that London’s high end residential market is depressed.
The slowdown is relative to a market that has for the past 20 years been “abnormal”, said Niccolò Barattieri di San Pietro, whose company, 70% owned by the Abu Dhabi Financial Group, is building 355,000 sq ft (285 units) of state of the art residential accommodation, plus office and retail space, at the Broadway scheme in the St James’s area of the city.
At least five of its lower-priced apartments have been sold two months into a five-year global marketing campaign, taking in the Middle East and Asia, where Northacre has never actively sold into before.
Northacre has a nearby scheme at 1 Palace Street, SW1, which has 300,000 sq ft of accommodation across 72 high-end apartments opposite Buckingham Palace. It is understood that 70% of these apartments have been sold.
Uncertainty to continue?
Barattieri di San Pietro admitted sales of London’s prime residential stock were sluggish, but believes London has been spared the full brunt of Brexit uncertainty and stamp duty pressure on buyers.
“It’s slower, there are less buyers around, and there are pricing pressures, no doubt about it. It’s very possible that those pricing pressures will continue for a couple more years.
“But three or four years ago when the market peaked in the middle of 2014, I would have said that over the next few years, after you’ve had a bull market run for 20 years, you’ve had stamp duty go up twice, you’re going to have a change to non-domicile rules, you’re going to have Brexit, an unstable government and Labour potentially coming in to power, I would have told you that the hit to the market would have been much greater than it has been.
“In my view, the high end and super low end will do decently well in the coming years; forget the times we’ve had, it will be flat-to-slightly-up in the coming years. The problem lies in the middle section because there’s a huge amount of supply coming on the market.”
A view from above
At the Broadway, the developer is banking on the views of London landmarks, including Buckingham Palace, from oversized windows in the apartments, as well as the high-spec finishes, to entice buyers.
The six buildings have been named after three kinds of diamond: Sancy, Paragon and Cullinan, and they are linked by two landscaped podiums.
The apartments start at £1.56m for a 550 sq ft one-bedroom apartment, to £20m for a 5,000-6,000 sq ft, five-bedroom penthouse.
The scheme, due for completion in 2021, will also include 25,000 sq ft of high end retail space on the ground floor, and 117,300 sq ft of office space on the first three floors.
It will also have a public square and pedestrianised piazza, as well as a new street linking St James to Victoria.
Residents’ amenities will include a games room and spa with a 25m heated pool.
Barattieri di San Pietro said: “The old New Scotland Yard building was unfortunate. It wasn’t beautiful and it never won any awards. I think we did a service to the London community bringing it down.
“What the new building does is take great advantage of all the views. The panoramas you have from these apartments are truly incredible.”
Barattieri di San Pietro said the minimalist design approach to the apartments would give its eventual occupants a “canvass to express themselves because when their friends come in that’s what their friends judge” adding that “for some of these people the art is more expensive than the actual apartment”.
Affordable housing
In September, London mayor Sadiq Khan refused permission for Northacre to add 27 more, but smaller, homes on the site because of its “appallingly low” 4% affordable housing provision.
Barattieri di San Pietro said Khan’s 35% affordable housing policy had “missed the point”.
“Sometimes people put policies in place at a time when they won’t be able to be taken into consideration because, when we’re doing viability in the next five years, I can guarantee you that 99% of the schemes in central London won’t be able to afford that level of affordable housing – what is delivered by the private sector will come down regardless of what the policy is.
“In this instance it’s a shame, London needed 27 more units.”
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