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July 31, 2013
KKindex – Prime Central London Property Index from Khalil and Kane
The KKindex was developed by Khalil and Kane to track the average highest achieved sales prices for high specification, new build and unique properties on prime streets within a selection of prime areas in prime central London. The KKindex began as an internal project in 2009 to assist in overcoming the challenge of finding comparable evidence for unique and high specification residential properties for our clients. The index has been published on our website since 2011.
Sales data is only included for well finished, new build and recently modernised properties sold on either long leases, share of freehold or freehold for hand selected prime streets within each of the selected prime areas. The data for such properties is collected over two quarters and tracks year on year gains. The focus on the very top end of the market is the distinguishing feature of the KKindex from other indices, which may track more general and average price movements across entire boroughs. This is the cause of differing results from other indices that may track London boroughs as a whole or include sales data for property in less desirable conditions or short legal tenures.
The most recent KKindex update tracks price changes between January and June (quarters 1 and 2) 2012 and 2013. There are some significant price changes to note.
Knightsbridge still retains its reputation as London’s most expensive residential area and furthermore demonstrates some of the strongest price growth year on year at +11.4%. Prices have been buoyed by strong sales figures at Rutland Gardens, where a property at the top end of the gated street adjacent to Hyde Park achieved over £4600/sqft. This was supported by sales of the penthouse at the Lansbury development which achieved a sale within 24 hours of launch at £1million over the asking price at £4460/sqft and sales at The Knightsbridge development at just below £4000/sqft.
Mayfair also evidences double digit gains with capital values rising +10.1% over the period, rising slightly slower than Knightsbridge. This gain in Mayfair has been driven by sales achieving over £4,000/sqft in Grosvenor Square and over £3750 on Mount Street.
The most notable increases are in Soho where the value of prime property stock has surged +14.17% year on year. This is the result of sales at the Hat Factory in Hollen Street, Paramount House and 37 Soho Square above and below the £2000/sqft mark as a number of unique and well finished residential developments are gentrifying the area along with its already thriving restaurant scene.
Other strong gains have also been demonstrated in Holland Park, where numerous sales on the street with the same name have led price growth at 8.4% together with sales of Addison Avenue. Strong growth in Holland Park demonstrates the continuing appeal of detached homes in leafy surroundings for UHNW purchasers, as particularly the former are rare feature in prime London locations.
Robust growth above 5% is also evident in Chelsea (+6.01%), Kensington (+5.97) Notting Hill (+5.14%) and Hampstead (+5.53%). Growth is traditionally driven by domestic buyers in these areas as overseas buyers largely from Russia and the Middle East who are most active at the higher end of the market often have a preference for Knightsbridge and Mayfair which may explain for slightly more modest growth in these areas.
In Chelsea, notable prices increases where achieved on Walton street where one freehold block sold for over £2700/sqft, previously selling £1350/sqft in 2008 in a less modernised though fair condition. In Kensington, the price growth was led by sales at The Academy Gardens development on Duchess of Bedford’s Walk in the region of £2500/sqft and in Notting Hill a chic freehold home, with fittings from latest desginers such as Tom Dixon on Chepstow Crescent achieved the highest price at over £2100 in the first half of 2013 in the area.
Slower growth is exhibited by Belgravia, St Johns Wood which have risen by 2.81% and 1.89% respectively. The lower rate of growth in Belgravia is due to some high sales achieved in the first half of 2012 at Chester Square just below £4000/sqft and at West Eaton Place above £3500/sqft. The highest sales however in the first of the year in Belgravia have been achieved in Wilton Place at £3290/sqft and Eaton Square at £3890/sqft. Eaton Square has been home to many famous including the fund manager George Soros, art collector and ad man Charles Saatchi and two James Bond actors, Roger Moore and Sean Connery.
The KKindex however does not only evidence price increases as there is a dip in Lancaster Gate year on year. This dip is explained by a number of sales at The Lancasters in the first half of 2012 including sales above £3300 shattering previous record prices in the area. The first half of 2013 featured more sales at the development but not at this level and although there were sales in some of the other most desired W2 addresses such as the gated Hyde Park Gardens, sales below £2000/sqft on this street meant there was an overall downward movement in prices in Lancaster Gate.