There are 61 new residential development schemes planned for Mayfair, delivering an additional 401 private residential units and 1.1 million square feet of new residential space, according to the report by Wetherell and Dataloft.
It predicts that the best Mayfair properties will hit £5,000 per square feet during 2014, and will hit £10,000 per square feet within the next 10 years driven by the arrival of new ultra prime residential projects coming on stream in the next few years in Grosvenor Square, Piccadilly and Curzon Street.
The report points out that Mayfair outranks Knightsbridge in both physical size and the size of its residential market. Mayfair is 285 acres in size, providing 4,363 residential addresses, Knightsbridge is less than two thirds the size, providing just over 2,500 residential addresses.
Also, the best Knightsbridge properties currently hit £7,500 per square feet but a lower development pipeline should help facilitate Mayfair overtaking this figure. Of these 401 residential units, 13 are currently under construction whilst the balance of 388 are in the development pipeline of which 286, or 74%, have been granted planning permission whilst the remainder are at the planning or financing stage.
Wetherell highlights that 77% of these planned projects will create new luxury homes from converting former commercial, retail, government/public or Embassy buildings to residential use. Of the 401 residential units, 245 will be created by office to residential conversion, another 65 from the conversion of government and public buildings, foreign embassies and diplomatic properties or retail and leisure buildings and 91 from entirely new residential or mixed-use developments on redundant sites.
The analysis has found that there is a move towards creating large three bed plus luxury apartments, houses and grand mansions as part of this new planned development which Wetherell says will help to further raise property values across Mayfair and help the district overtake Knightsbridge to become London’s top luxury address.
Some 52% of schemes at application or permission stage have three plus bedrooms, compared to only 40% of those currently under construction. In addition, whilst the number of large Mayfair homes will rise in the future, the number of smaller studio and one bedroom homes being developed will drop from 21% of stock to 12%.
The research also found that the creation of Mayfair’s largest single unit projects consisting of new penthouses, houses and mansions is being undertaken by private Ultra High Net Worth Individuals or families, who include UK and overseas based millionaires, billionaires and Royal families rather than commercial developers.
Currently private individuals account for over 50% of the Mayfair development schemes that consist of large houses or mansions, with the majority of the remainder being built by niche uber luxury firms and contractors speculatively, with the aim of selling them to private UHNWI individuals.
The research also says that 94% of Mayfair’s multi unit development is being undertaken by larger developers who specialise in super-prime or trophy projects with the top five developers in Mayfair currently being British Land, Native Land, Finchatton, Caudwell Properties and Brockton Capital. Mayfair is an area the volume developers such as Barratt, Berkeley and Crest Nicholson tend to avoid.
‘Mayfair will overtake Knightsbridge as London’s leading luxury residential address. The only reason that Knightsbridge has lead is because new stock has been built there such as One Hyde Park, The Knightsbridge and Trevor Square. In contrast, Mayfair, which was predominantly residential up until the 1890s, has been starved of new residential stock over the last 50 years,’ said Peter Wetherell, managing director of Wetherell.
‘Now with some £5 billion of new residential development in the pipeline, providing over 400 luxury homes, Mayfair is entering its most exciting decade over more than a century. Mayfair’s new residential stock will enable the district not only to just catch up with Knightsbridge, but also exceed it to become London’s top luxury address,’ he added.
Wetherell also revealed that in 2013 some £472 million worth of residential properties were sold in Mayfair at an average sales value of £3.75 million, with sales volume by turnover up by nearly 25% on 2012.
It added that Indian, European and Asian buyers are increasingly dominating the Mayfair market and they tend to prefer high quality newly refurbished period or lateral flats or new trophy houses and this is helping to drive the market for new developments.
