The property developer behind the conversion of central London’s Centre Point office skyscraper into multimillion-pound luxury apartments has given up trying to sell the flats after receiving too many “detached from reality” lowball offers.
Mike Hussey, chief executive of the developer Almacantar, said the company had decided to halt formal sales of the flats in the 1960s brutalist tower, now called Centre Point Residences, rather than slash prices.
The company said concerns about Brexit and possible tax increases on overseas investors were encouraging potential buyers to make offers well below the asking price.
The decision to halt sales means about half of the tower’s 82 flats, which range from £1.8m for a small one-bedroom apartment to £55m for the two-storey five-bedroom penthouse, will now lie empty, adding to a glut of unsold ultra-luxury property across London.
Hussey said there was still interest from buyers, but “offers are now reflecting uncertainty on potential changes to stamp duty, taxation of overseas investors and other fiscal policy proposals”.
He added that because Almacantar had sold half of the apartments, cleared the debts run up by construction and leased the retail space at the bottom of the tower “we see no point in chasing a market that is increasingly detached from reality”.
Increasing numbers of luxury London flats are now proving hard to sell. All 10 of the £30m-£50m apartments towards the top of the Shard have been empty since the tower was completed six years ago after its owners, led by the Qatari royal family, failed to achieve high enough offers.
More than half of the 1,900 ultra-luxury apartments built in London last year failed to sell, adding to fears that the capital would be left with dozens of “posh ghost towers”. The swanky £1m-plus flats, complete with private gyms, swimming pools and cinema rooms, are lying empty as hundreds of thousands of would-be first-time buyers struggle to find an affordable home.
It is not the first time that Centre Point has failed to find occupiers. When the tower was completed in 1966 it did not attract enough high-paying office tenants and remained vacant for a decade, leading to it to be nicknamed “London’s empty skyscraper”.
Homelessness campaigners staged an occupation of the tower in 1974 to highlight the problem and the tower then lent its name to homelessness charity CentrePoint.
“Now its happening all over again – Centre Point’s redevelopers have taken fright at Brexit jitters and decided many of its luxury apartments must remain empty again,” said Chris Bailey, campaign manager of charity Action on Empty Homes.
He added: “There are over 20,000 long-term empty homes in London, while over 50% of the 79,880 families and 123,230 children in temporary accommodation in England are in London, costing London’s councils hundreds of millions a year. London can’t keep on funding this while land is gobbled up to build empty towers for an increasingly speculative global market which now appears to be faltering before the spectre of Brexit price dips.”
The drop in confidence among buyers appears to have caught Almacantar by surprise as the tower’s development team were very confident that all of the flats would be snapped up in short order when they gave the Guardian a tour of the tower this summer.
Kathrin Hersel, Centre Point’s property director, said the duplex penthouse spanning the 32nd and 33rd floors would sell itself. “There are plenty of people in the world who could afford it,” she said.
That penthouse features five ensuite bathrooms and a wraparound terrace with a vista across all of London taking in St Paul’s Cathedral, Tower Bridge, the Houses of Parliament and beyond to Surrey Hills on a good day.
Almacantar had even sold one £5m two-bedroom apartment to the parents of a Chinese student about to start studying at UCL.
Hussey said Almacantar, which is part-owned by Italy’s billionaire Agnelli family, might relaunch sales after a Brexit deal had been agreed. “When buyers feel more confident about the wider macro situation, they will also feel more confident about paying these prices again,” he told the trade magazine Estates Gazette. Hussey declined to speak to the Guardian.
Almacantar has told its estate agents at Knight Frank and CBRE to stand down. Mark Collins, chairman of CBRE, said: “Centre Point Residences is a beautifully executed project that we believe will have enduring appeal in the market.” He added they would be ready to try selling again next year when there was “a clear runway ahead”.
Henry Pryor, an independent luxury property buying agent, said rich overseas buyers were very concerned about the risk of overpaying for central London properties particularly if the economy suffered in the wake of a disorderly Brexit or if Jeremy Corbyn became prime minister and introduced a wealth tax.
He said: “The wealthy are far more worried about the risk of a Corbyn-led government than even the hardest of Brexits.”
guardian.co.uk © Guardian News & Media Limited 2010
Published via the Guardian News Feed plugin for WordPress.
