But change is afoot: no longer just a haven for hedge funds, designer shops and the odd rich Russian resident, Mayfair’s stock of residential property is rocketing as offices are converted into homes to meet demand of would-be private residents. The commercial property agent H2SO reported that two million sq ft of offices is being converted into homes and there are several redevelopments in progress.
Oliver Hooper, of property consultants Huntly Hooper, says: “The change of use of these buildings is because the capital value of residential space is much more than offices.” Hooper says that prices have gone up from about £1,700 per sq ft to over £2,500 p sq ft in most instances within the last few years, with areas such as Grosvenor Square over £3,000 per sq ft.
Peter Wetherell, of Wetherell Estates, an established Mayfair agent, says: “People always say to me, ‘Mayfair is undervalued’ – the problem was lack of stock. But now with more availability of stock, the market can motor. There’s huge demand.” Indeed: Wetherell recently put a Georgian house on the market for £14m – four windows across, it was a former office on Upper Grosvenor Street. Within six weeks there were 140 viewings, 19 offers, £300m worth of bids (the majority in cash) and it went for far over the guide price.
Major residential projects include Walpole Mayfair at 4-5 Arlington Street: five very luxurious apartments next to the Ritz and just behind the Wolseley; and the “In and Out” building on Piccadilly, a currently ramshackle mansion that is to be converted into 24 high end apartments over 70,000 sq ft, looking out on Green Park. Further rumoured developments include the US Embassy in Grosvenor Square, bought by Qatari Diar, developers of One Hyde Park and Chelsea Barracks. And Richard Caring, owner of Caprice Holdings (the Ivy and so on), is in charge of a consortium of investors who have won planning permission to turn the US Navy Headquarters on Grosvenor Square into 31 luxury apartments.
Why now? Economically, super-prime London has remained an exception in Britain, bucking all trends. Peter Wetherell says: “The West End is a sort of nation state on the world stage. It’s not a bubble, more of a cocoon. But cocoons can still break: it depends on the government not over-regulating and screwing up London’s ability to be a financial hub.” With the cocoon still in tact, though, residential is better value for developers, per square foot as – unlike in offices – toilets, stairwells, lobbies and such count in the square footage. And, as commercial outfits increasingly value larger spaces with open-plan floors, rather than the smaller rooms of the period buildings, more commercial leases are coming up for grabs.
Before it was hedge fund paradise and home to dozens of Michelin-star restaurants, the most powerful of Brits (and in the context of the Empire, the world), resided in Mayfair. “Before WWI, Mayfair was home to the aristocrats and plutocrats that ruled the globe,” says Wetherell. But the wars severely dented the finances of those who had been able to live there and private homes became hotels (the Dorchester and Grosvenor House Hotel, for example). Following the Blitz, the Square Mile needed new offices and Mayfair rents were relatively low. Around 1990, leases on office buildings expired, and residential properties began to be redeveloped. Now, with London as nightlife and cultural capital of the world, Mayfair is at the heart of another renaissance, but only the richest need apply.