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Property

from Cathy (cathyvpreece@aol.com)

Times

July 11, 2003

Stalling penthouse sales given a jet boost

By Anne Spackman, Property Editor

PERKS offered to homebuyers have reached new heights: 45,000ft above sea level to be precise. Developers of luxury London homes have become so desperate to attract buyers that one is offering the use of a free private jet with every £1 million flat. Anyone who signs up for a penthouse at Canary Riverside, the most expensive property development in the Docklands, will receive a Marquis private jet card entitling him to free flights and limousine travel for a year, worth upwards of £60,000 — the equivalent of four return trips to the South of France with six passengers.

There are seven remaining penthouses, priced between £1.75 million and £2.95 million. The prices have already been reduced by 25 per cent, as the Singaporean developers of the scheme struggle to sell their last units.

They are in a London market that is top heavy with penthouse flats. Figures from London Residential Research show there are 131 genuine penthouses, with large volumes and ceiling heights, for sale and a further 145 to which developers give penthouse status by virtue of their location.

The most expensive is the 10,000 sq ft (929 sq m) space to be built on top of a scheme by Hyde Park called The Knightsbridge. The developers suggested last year that it would be priced at nearly £30 million, but that figure has fallen to £18 million.

These large price reductions are in stark contrast to the picture of the property market presented by the Halifax and Nationwide building societies. Their latest figures show house prices in England and Wales still rising.

Annual house price inflation is running at 22 per cent, according to the Halifax, with the average house price still rising by about £1,000 a month. But these national statistics disguise sharp differences between the market in London, where prices are falling, and in parts of the North and Wales, where they are still rising strongly. Central London has been the area worst affected by the downturn and penthouse flats have been the properties hardest hit. They appeal most to single monied men and sold strongly during the dot-com boom.

Now, with buyers of luxury flats thin on the ground, developers are having to create ever more enticing incentives. Martin Tan, the chief executive of Canary Riverside, said: “We can offer our buyers more of the one thing they can’t buy — time. We hope this will encourage people to come and take a look.

“Whether they buy will depend on whether they think the penthouses are good value and whether or not they like them.”

Developers at The Knightsbridge, London’s most expensive scheme, marketed their multimillion-pound flats in Moscow and St Petersburg, hoping to catch some of the Russan billionaires who have dominated London’s property market since the downturn last year. Roman Abramovitch, the new owner of Chelsea Football Club, has a large flat in nearby Lowndes Square.

Canary Riverside has so far failed to attract the Russians, who prefer to be in the West End rather than the Docklands. Most of the penthouses already sold have gone to investment bankers based at Canary Wharf or in the City.

The Canary Riverside penthouses have interiors by a variety of designers, including the architect Eva Jiricna. They also have plenty of the luxury gadgets that Russian buyers often like, such as a rotating bed in one flat and a glass bath in another. Should a Russian buyer be prepared to look east, for the buyer of the £2.3 million penthouse the private jet card on offer would cover a couple of return trips to Moscow.

More modest properties are also offering incentives. Most will pay the buyer’s deposit, stamp duty or legal fees and offer up to £5,000 cashback. At Kennington, South London, the developers of Marlborough House offer a free £2,500 scooter to anyone signing on the dotted line.

At Riverside Quarter in nearby Wandsworth, London Town have gone one better, handing over a Mini on exchange of contracts.

Developers believe that eye-catching gimmicks increase viewings. One remarked recently: “I have no problem selling to anyone who comes through my door. It’s just no one is coming through my door at the moment.”

(posted 7567 days ago)

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