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The True Centre

21st October 2020

We have just agreed a couple of deals close to Marble Arch.  The properties consist of two bedrooms and, surprisingly, three bathrooms.  They have been finished to an extremely high standard.  I would estimate the costs would have been around £60K each.  The woodwork is all hardwood and bespoke to the rooms, even the beds have been custom made.

Our office premises used to be across the road, on the 10th floor, on Bryanston St, until they were knocked down for a residential newbuild; this is a locality we know extremely well.

It is unfortunate for the seller that this is a receivership sale.

The price for both properties is £1.4M, approximately £700K a piece.

The comparables show a discount of 30%, which is massive given the location.

The more central the location the harder it is to secure any discount, let alone almost a 1/3 off the retail price.

Prices across the road run at about £4,500 per sq. ft.  This equates to £3.7M; and it is literally 20 seconds across the road.

The product of course is vastly different.  The newbuild has “Covid proof” air purifiers, and will come with a spectrum of services and a service charge to match.

Our apartments seem quite humble in comparison.  There will be some effect on the price of these apartments but more from the effulgence of the block.  The newbuild sales will naturally raise the average pounds per sq. ft. of the area.

This is not a purchase for those who count their pennies every month.  The gain on the property will be purely in the form of capital gain.

Marble Arch is the true Bull’s Eye centre of London.  You have Oxford Street on the East, Park Lane on the South, Edgware Rd on the North and Bayswater & Notting Hill on its West.

The location sits on the corner edge of Hyde Park.

With the cost of financing so low currently, you should be able to generate a revenue on the investment.  Currently, it’s possible to get 2% fixed for 5 years.

The real gain on this property is in the capital growth.  It suits someone who doesn’t need income, and can afford to tuck the funds away for a period of 5 years; after which time the investment should mature nicely.

Though this property may seem highly priced to the uninitiated investors, this is close to the bottom of the barrel relative to its location.

This is an important point.  We are in unprecedented times, with a future which looks even more uncertain; either by design or chance.

In recent history there have been times when, during uncertainty, investors have chosen property to park their funds to weather the storm.  On one level this might seem unintuitive, however, on another it makes perfect sense.  When the economy is fluctuating, isn’t something real, that you can touch, a good place to invest your fiat money?

Property is the logical conclusion, as is gold.  And on a global playing field, London property fairs well for the international investor; moreover, they only seem to know certain spots in central London.

Rightly or wrongly, the rest of the UK doesn’t exist.

Suresh Vagjiani

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