GROSVENOR Group, which owns most of London’s upscale Mayfair and Belgravia districts, has said the rate of luxury home price growth in the capital looks unsustainable after years of foreigners pouring cash into the safe-haven market.
Luxury home prices have surged 53 per cent since 2009, compared with 25 per cent in Greater London, as investors sought refuge from Europe’s debt crisis, and political uncertainty in the Arab world and Russia, property group Knight Frank has calculated.
The buoyant market has since attracted a slew of commercial developers such as British Land and Land Securities while Grosvenor has also cashed in by converting offices back to their original use as homes.
“The extremely high rate of growth over the last two, three years is a thing I’m concerned about and I think it is probably unsustainable,” Grosvenor’s chief executive Mark Preston said.
The firm is controlled by the Grosvenor family, headed by Gerald Grosvenor – the Duke of Westminster – and said pre-tax profit rose 12.5 per cent to £354.4m in 2012, driven by central London property price growth and improved performance.
The value of its property assets was £5.8bn unchanged from 2011.