Marylebone and Mayfair, which straddle Oxford Street in central London’s West End, are both long-established prime residential areas that have enjoyed a recent influx of international buyers. Prices in Marylebone have risen from £1,200 per sq ft in 2007 to more than £2,000 per sq ft by the end of 2012. Over the same period, those in Mayfair rose from £1,500 per sq ft to £2,500. Developers have responded, and in the last couple of years there has been a significant rise in new niche residential schemes in north Mayfair and south Marylebone – an area that Knight Frank has rather dubiously dubbed “Marylefair”.
The driving forces behind this intense focus are twofold. Firstly, the streets either side of Oxford Street, which have been dominated by shops and offices, have recently offered ripe opportunities for commercial to residential conversion.
“There was a clear opportunity to acquire buildings with commercial use in this area at rates of 25-50 per cent below residential values and then obtain a change of use and develop luxurious high-end units,” says Christian Lock-Necrews of Knight Frank, Marylebone.
Secondly, there has been a growing interest in the impact of Crossrail, the new high-speed train service, which is due to open in 2018. The line will connect Maidenhead to the west of London to Shenfield in the east, with stops at Heathrow, the West End and Canary Wharf. Crossrail predicts that an extra 70,000 people daily will use Bond Street Tube station as a result.
“Crossrail will undoubtedly increase prices in the immediate area as wealthy commuters will want to enjoy the benefit of immediate access to the Crossrail link from Bond Street, which will almost halve the journey times to Heathrow and Canary Wharf,” says Harvey Cyzer of Knight Frank, Mayfair. “International investors and those looking for pieds-à-terre are already quizzing us about Crossrail and its benefits.”
So far, at Verge Mayfair – a development by Oakmayne Bespoke of 12 apartments, from studio lofts to two-bedroom penthouses, which was launched last year – nine have sold to buyers from China, Hong Kong, Malaysia and Europe, all wanting high-end pieds-à-terre or rental investments on the doorstep of Oxford Street, South Molton Street and Bond Street. The last three apartments (a loft and two two-beds) are available through Knight Frank from £1.65m to £4.5m.
Historically, the area north of Grosvenor Square towards Oxford Street had short leases for residential property and little investment was put into the buildings. “However, all the exciting improvements to this end of Oxford Street, combined with the expiry of leases, has enabled Grosvenor and other landlords to look at this segment of Mayfair with a new vision,” says Peter Wetherell, founder of estate agent Wetherell.
As a result, the Grosvenor Estate is now investing heavily in public realm works in North Audley Street, Duke Street and Grosvenor Square. Brown Hart Gardens is undergoing extensive restoration and in Balderton Street, the first hotel run by Rex Restaurant Associates’ partners Chris Corbin and Jeremy King – the Beaumont – is expected to launch in 2014.
Just north of Oxford Street, near Marble Arch, another upmarket development is being launched by Galliard Homes. Great Cumberland Place, which launches this month, is a redevelopment of two late 19th-century London townhouses into seven one-, two- and three-bedroom apartments. There are two one-bedroom mews apartments on the lower ground floor, one of which has a small patio and the other opens on to the cobbled Clenston Mews at the rear of the development.
Each apartment encompasses the whole floor across both townhouses, and has direct lift access. Two have balconies and prices range from £995,000 for a one-bedroom mews apartment to £2.7m for a three-bedroom, two-bathroom apartment.
At the end of the month, Galliard will also be launching 7 Portland Place, W1 – a conversion of an Edwardian property built as a grand apartment building and converted into offices in the 1930s. Just north of Oxford Circus and opposite BBC Broadcasting House, this imposing building will be returned to residential use with two-, three- and four-bedroom apartments, some of which will have balconies, others a garden or roof terrace. Prices will range from £3.5m for a 2,000 sq ft duplex apartment to £6m for the duplex penthouse.
In March, Devonshire Property will be launching a development of five two- and three-bedroom apartments in Langham Street, just to the east of the BBC offices. Two properties have been sold in the converted art-deco building, leaving a two-bed, a smaller three-bed, and the penthouse. The properties are priced from £3.135m for the three-bed.
“There have been several recent developments in the area converting office space back to residential and this has allowed for very good lateral flats to be created,” says Rachel Webster of Property Vision.
One such lateral apartment, in a period building overlooking Grosvenor Square, is currently on the market through Wetherell. This four-bedroom property, with two reception rooms, library and gym, has direct lift access and a private garage of almost 700 sq ft. It is on the market, as of last week, for £15.95m, down from £17m.
For someone looking to invest in a substantial house, Hamptons is selling a refurbished Grade II-listed five-bedroom Georgian townhouse with self-contained flat on Manchester Square for £16m. Around the corner, 16 Fitzhardinge Street is a newly refurbished eight-bedroom property for sale for £13.5m through Knight Frank and Prime Portfolio. Number 16 is part of a trio of properties owned by Luxus Developments, the other two being likely to go on the market, unconverted, later in the year.
● Average price: £1,750 per sq ft
● Increase in prices over last two years: 17.9 per cent in Mayfair; 23 per cent in Marylebone
● In 2012, international purchasers accounted for 35 per cent of sales in Mayfair and 48 per cent in Marylebone
● The most expensive new apartment in ‘Marylefair’ costs £6m
What you can buy for ...
£500,000 A small, one-bedroom apartment
£1m A small, one-bedroom maisonette
£5m A large, four-bedroom apartment