SUPERNOVA LONDON

London's top-end residential property market continues to boom, economic slowdown notwithstanding. Prices are still rising fast, so whether you're an investor or simply in need of super-luxury lateral living, it's time to start looking. GILES HANNAH

I often work in the South of France and keep a close record of the super yachts particularly in Antibes, which has one of the deepest harbours where you can see the World’s most impressive yachts. While having lunch with a client on board his 80 meter yacht (price £1.5 million - £2 million per meter) I noticed that if you tally up the total of just seven of the largest yachts in the super yacht section you are looking at over one billion pounds floating. It is fascinating to see who is spending, who owns these magnificent trophies as you can guarantee they are in the market for the finest super prime London residential offerings as well.

Buyers at the top-end like choice. This is the most important factor in the record prices being achieved in top-end residential property in London today, making the city Europe's - and in some cases the world's - most expensive luxury residential destination. In London there is limited super prime property for sale, the best properties rarely come to the market; and when they do they are still snapped up quickly. There are many limitations on building new developments in prime locations and many of the older existing properties are not designed for today's living.

At a recent meeting, a client asked me as to whether he should buy a house in Eaton Square or instead two of the residences (out of only six being built) at the new Bulgari development in Knightsbridge. Knowing this client very well, my suggestion was that the house in Eaton Square was over too many floors and had difficult planning issues such as installing lifts and no air conditioning. The other choice was a brand new residence, lateral floor space, service of the luxury hotel below, and security, along with Harrods as his local supermarket. All of these factors were more important to him than the historical value of Eaton Square, so the Bulgari residences were his choice.

The London super prime residential market can be classed as being flats or houses worth above £15,000,000. They tend to be located in Holland Park, Kensington, Belgravia, Knightsbridge, Chelsea, Mayfair, St James’s, Regent’s Park, St John’s Wood and Hampstead. Some properties can trade in excess of £7,000 per sq. ft. making London the most exclusive and valuable market in Europe. Indeed, this is twice the price of the finest properties in Paris or Geneva.

The super prime market is led by buyers from Russia, Ukraine, Kazakhstan, Qatar, UAE and some UK purchasers. They require something rare; often it's a trophy and many see it as a great status symbol of success. London is seen as a safe place to buy and has a historically strong market. The irony though is many of the finest addresses are left empty all year round and some properties have not been lived in for nearly ten years. You only have to pass through Belgravia at night and notice how many properties are in darkness.

I am often asked about the importance of the Asian market where we have a number of clients. The main difference with Chinese buyers is that they look for investments, more than trophy purchases. In my experience the Chinese, in particular, seek out lower price ranges due to restrictions of moving funds out of China, their desire is to get a deal, a solid investment and London does provide this. However, in the last few years, I have not sold a property below the asking price at levels ranging from £15,000,000 to £100,000,000.

If something is exceptional, it will sell and at a price the buyer is willing to spend to get the correct property. The Asian market is exciting and clients from Hong Kong and Singapore have bought some excellent London properties which they then let and gain a return on investment rather than keeping their funds in savings accounts.

Although there have been tough global economic times, London is unique. It is viewed still as a global financial centre, the standard of living is high, it offers some of the best restaurants and hotels in the world, a stable political system, education centres of excellence and despite the critics, a trusted banking system, which makes London increasingly appealing to the discerning buyer. London welcomes different cultures and nationalities and there are many private banks and law firms with international departments aiding the process of trust when purchasing for ultra-high net worth individuals. Super prime London prices are still rising and up to 30% price increases are predicted over the next five years, as today's spectacular developments are joined by others.

Underlying this super prime market is the lack of choice, which drives a purchaser’s desire to own the most elite residences London has to offer regardless of the price. The demand does not go away even in tougher economic times; there are individuals and families always able to find a rare home and make emotional purchases not just financial decisions.

Giles Hannah is Director London, Europe, Middle East and Africa and Head of Sales, Christie's International Real Estate. christiesrealestate.com