Dec. 20 (Bloomberg)
A penthouse apartment in London's Knightsbridge neighborhood was purchased for about 100 million pounds ($157 million), a person with knowledge of the transaction said.
The undisclosed buyer paid about 7,000 pounds a square foot for the unfurnished duplex in the Bulgari Hotel and Residences, according to the person, who requested anonymity because the deal was private. A second penthouse unit in the development is on the market for 69 million pounds, the person said.
London's luxury-home values have accelerated this year as international investors seek a haven for their wealth in the city's central neighborhoods, such as Belgravia, Knightsbridge and Mayfair. The hotel is setting a “new benchmark” for prime residential real estate as its location, link with luxury retailer Bulgari SpA and limited number of units helps boost prices, Giles Hannah, a Christie's International Real Estate director handling the sale, said in a telephone interview.
“Having the Bulgari brand adds about thousand pounds a square foot,” Hannah said. “You look at the number of apartments at the other developments in London compared with the one I'm looking after, it's not possible to hand make everything in a larger development. Nothing here has been mass-produced.”
Prime Knightsbridge Developments Ltd. owns the Bulgari project, which has 85 hotel rooms and eight apartments. JPMorgan Chase & Co.'s International Bank unit is the lender for the project, according to Land Registry documents. Construction work will be completed in the second quarter of 2012, according to the hotel's website.
The price is nearly double the $88 million that former Citigroup Inc. chairman Sanford Weill's Manhattan apartment is being purchased for by the daughter of a Russian billionaire. That would make it the most expensive residential transaction ever in the New York borough, according to Jonathan Miller, president of appraiser Miller Samuel Inc.
The 14,000-square-foot (1,300 square meter) Knightsbridge penthouse was sold in April, according to the person familiar with the deal. Prime Knightsbridge referred calls seeking comment to Christie's, which is handling the sale of the eight apartments. Hannah declined to comment on the price paid.
A home in the One Hyde Park condominium complex, which was conceived by Christian and Nick Candy, sold for 7,500 pounds a square foot after the interiors were furnished. Knightsbridge is one of London's wealthiest neighborhoods and home to luxury retail outlets including the Harrods and Harvey Nichols department stores. LVMH Moet Hennessy Louis Vuitton SA reached a deal to buy Bulgari, which has a store on Sloane Street in Knightsbridge, last March.
Developers can get as much as 30 percent more a square foot for branded residences, said Gerard Nolan of broker Gerard Nolan & Partners, in an interview. The appeal for buyers is that the hotel manages their assets and ensures quality control of services and staff, said Nolan, who has been involved in the sale of more than 350 hotels in London.
Branded luxury residences are expected to increase as developers take advantage of the premium that some labels can add, Knight Frank LLP said today in a report.
“I can see the model being heavily exploited in the capital cities that are regarded as the most international, as well as the most luxurious vacation hotspots,” Stephan Miles- Brown, the broker's head of residential development, said in the report.
Prime central-London prices have risen around 40 percent since the market's last slump in March 2009, Knight Frank said earlier this month. Luxury home prices will rise 5 percent next year, the London-based broker said in October.
--With assistance from Simon Packard and Neil Callanan in London Editors: Jeff St.Onge, Andrew Blackman.