Billionaires Seek Turnkey Houses Over Condos
24th September 2014 Tara Loader Wilkinson
The ultra wealthy prize the rare, and as the world’s prime cities fill with blocks of luxury skyscrapers, detached single-family residences are coming back into fashion.
At least this is the hope of a number of developers who are moving into the space.
Royce Pinkwater, the New York-based former senior vice president of Sotheby’s International Property, is launching Pinkwater Development this month. It will specialise in turnkey luxury detached family homes in Miami, LA and other cities in the US. Pinkwater runs a private member platform of nearly 1,500 multi-millionaires and billionaires, and believes that this is now what her clients are looking for.
“In the past, our billionaire members might have owned 10 apartments all over the world, most of which they would barely live in. These days some are looking to consolidate; buy fewer homes, but spend more time in them with their families. So we are going to be creating beautiful turnkey family residences at a level which has not been offered before.”
Pinkwater expects the first properties to be priced around US$35 million and due for completion around 2015.
Meanwhile in London, the Candy Brothers have been buying up some major houses with a view to redevelopment into single-family residences. This includes a compound in the grounds of the Royal Hospital Chelsea tipped to attract a price tag of £150 million. Their rival property tycoon Mike Spink, who has been described as 'Nick Candy without the bling', is converting 3 Carlton Garden into a luxury single family home overlooking St James’s Park, reported to be priced at around £140 million.
Roarie Scarisbrick at London-based buying agent Property Vision pointed out that these developers are aiming at people who are buying into London and want a single house with historical and architectural importance to reflect this.
He said: “To some of the wealthiest buyers, the whole idea of living in a large condominium building with strangers and complex leases appears positively second class, even if it is One Hyde Park.”
It all comes down to rarity, agrees Trevor Abrahmsohn, founder of Hampstead-based estate agent Glentree. “In Mayfair there is a dearth of very large detached single family homes, so there is increasing demand. This type of buyer wants one-of-a-kind and is prepared to pay for it.”
This was not always the case. Rewind 10 years ago and zero-maintenance, ultra-luxury apartments were the exception, not the norm. One of the pioneers in this space was the Candy Brothers’ One Hyde Park which launched in 2009, with its 86 palatial apartments selling for an estimated £30 million – £40 million (although at the time they were reported to be more). A year later Northacre rolled out the Lancasters renovation, with 77 units priced up to £16.5 million. In 2012, Frank Gehry-designed Opus Hong Kong came to market, with some of the highest prices ever seen in the city. At this point, these blinged-out skyscrapers were rare and exclusive.
But as the economy has improved, a flurry of fancy residential sky-scrapers awaits the market. Due for completion within the next four years are 56 Leonard, 432 Park Avenue and One57 in New York, South Bank Tower in London, the Clermont Residence in Singapore, the Tour Odeon in Monte-Carlo, and One Thousand Museum Condos in Miami among many, many others.
Sure, there has been and continues to be plenty of demand for palatial condos from cashed-up wealthy. Most of the aforementioned blocks are selling well, for example 432 Park Avenue which has already sold half of its apartments including the US$95 million penthouse. But for some of the highest echelons of Richistan, apartment blocks are no longer exclusive enough. Privacy-loving billionaires would balk at the idea of rubbing shoulders in lifts, sharing a swimming pool, and most of all, owning the same apartment as 80 other families.
And from a practical point of view, very wealthy international families tend to come with a substantial entourage; there are few apartment blocks that will accommodate this.
Yolande Barnes, head of research at Savills, believes that the demographic of buyer looking for single family homes is different today. Asian buyers always used to prefer apartments, she explained, but tastes are now shifting.
“The wealthy seek what is rare in a city and as many Eastern cities were developed from their low-rise predecessors, it has been high views and penthouses that were rare and sought after.”
Many Asians bought real estate in the West and created demand for the apartments that they are used to at home, she explained.
“Today, in those same cities it is landed houses that are rare, so you find these now fetching the highest values per square foot in Hong Kong and Singapore. In Tokyo, very large central houses are favoured by the very wealthy as space is so rare in that city,” said Barnes, “A few are now waking up to the fact that, on the global stage it is very rare to find freehold houses in the centre of a world city.”
This article first appeared on wealth-x. Reproduced with permission.
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