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£5billion plus of Mayfair Developments
 

This new report commissioned by leading specialist Mayfair estate agent, Wetherell, takes an in-depth look at residential development activity in Mayfair. It reveals the extent of development taking place now and in the future, it evaluates its worth, the type of development gaining planning consent and identifies the key players and potential opportunities.

The analysis reveals that there are 61 residential development schemes planned for Mayfair. These include five known development sites which have not yet been subject to planning consent.

Combined, these schemes will deliver an additional 401 private residential units, 388 of which are currently in the planning process. This translates to 1.1 million square feet of new residential space for the area.

Of the schemes identified, 42 (11%) are currently under construction, 286 (74%) have had planning permission granted, while 60 (15%) are at application stage.
  • 401 potential private residential units to be delivered
  • 388 units currently in the planning pipeline
  • 1.1 million sq ft of new residential space to be supplied
  • 649,000 sq ft delivered under change of use policy from office to residential
What’s Being Built?

With a lack of undeveloped sites available, change of use is the primary vehicle for development in Mayfair. The report reveals that 59% of schemes currently at application or permission stage comprise office to residential conversion. Eight percent of schemes are mixed-use to residential and 10% are classified as being ‘another commercial use’ to residential.

In total, 245 new units have, or will be created by office to residential conversion alone, with another 65 converted from unspecified commercial buildings. A staggering 77% of all new units proposed in Mayfair will be developed under change of use planning policy.

The City of Westminster, the borough in which Mayfair sits, acknowledges the need for more family homes. As a consequence, 23% of schemes within the development pipeline involve reconfiguring existing residential space to create fewer and larger units.

Refurbishment of existing, often period properties accounts for 73% of proposed schemes, delivering 61% of homes. Refurbishment extends to the practice of retaining façades behind which entirely new and extended buildings are built. This ensures that new developments retain a degree of character and blend seamlessly into their location. It also heightens the desirability of a building to potential buyers and enables developers to maximise their returns.

Where are the Opportunities?

Smaller schemes – between one to five units – account for the majority (66%) of developments proposed or under construction. Meanwhile, eight percent of schemes (5) are for 21 or more units. In these five schemes alone, there are 164 units proposed. This represents 41% of all new units currently in the Mayfair development pipeline.

The analysis shows that across Mayfair there is a move towards residential units with a larger number of bedrooms. Fiftytwo percent of schemes at application or permission stage have three plus bedrooms, compared to only 40% of those currently under construction. In comparison, only 27% of Mayfair properties sold to date in 2013 had three bedrooms, 44% had two.

Planning policy documents for the City of Westminster indicate that the borough is dominated by one and two bedroom properties, while there is an identified need to grow the supply of three plus bedroom family homes.

In its Unitary Development Plan (UDP) the City of Westminster goes so far as to recommend a minimum of 33% of units be family-sized (three plus bedrooms). It also names five sought-after residential areas where conversion of single dwellings to multiple dwellings will be unacceptable, clearly indicating a desire to encourage and ensure the provision of family accommodation.

Lonres data for 2012 shows that 86 sales in Mayfair equated to a total value of £35.2 million. In 2013, with Q4 still to come, 101 sales have totalled £36.3 million. An analysis of properties sold in Mayfair in 2012, compared to 2013 indicates an increase in price per square foot for all sizes of units, with an overall modest increase of 2.5% from an average of £1,913 psf to £1,965 psf for all properties sold.

In terms of the actual sizes of apartments, based on analysis of properties sold in 2012 and 2013, there has been an increase in all sizes of apartments apart from three bedrooms which have remained static.

It is not possible to extrapolate what these figures may mean for the development pipeline. Residential and unit sizes are not a requirement of current planning documentation. This is a long standing problem. In 2006, the GLA conducted a review of the London Plan and identified space standards as a key component. It concluded that such information should form a part of future planning documentation. This has yet to be implemented.

However, the table below compares the sale of properties during 2012 and 2013 to date in Mayfair, with those currently under construction and at application or permission stage. This shows a clear move towards units with more bedrooms.

Who’s Building?

Developers, unsurprisingly, account for 88% of private units under construction or in the development pipeline. Private individuals make up the additional 12%. Drilling down further into the data reveals that 41% of private individuals own schemes of five or fewer units, while 44% own just one residential unit.

In total, 28% of developments (17 by number) at application or permission stage consist of just one unit and of these 65% are houses. The research shows that private individuals account for 50% of all developers of schemes with five or more bedrooms. Unsurprisingly, larger developments remain the preserve of house builders and developers. Ninety-four percent of schemes with six or more units are in the hands of larger developers. In Mayfair, the property developers with the largest schemes include British Land, Native Land, Finchatton, Caudwell Properties, Brockton Capital, Rossmere Developments and The Crown Estate.

Development Opportunities

“The Next Decade will be the most exciting for residential Mayfair since the 1920’s” says Peter Wetherell who has been selling in the area since the early 1970’s “Mayfair has been starved of new residential developments for over 10 years whilst other PCL areas have created the record prices. The availability of new stock will prove and satisfy the local and international demand for the Mayfair area for those seeking a London home.”

The trend of commercial buildings in Mayfair reverting back to original residential use started in force from 1990 when temporary office permissions expired on the buildings. Over the last 23 years Wetherell have sold on behalf of Grosvenor and other landlords over 100 buildings and created 250 new homes.

The second wave of reversions is now due to considerably higher values for residential use verses commercial use for period buildings – which after all – were originally built as residential homes.

These reversions will increase residential addresses in Mayfair by nearly 10% and continue Mayfair’s journey in returning to London’s No.1 residential area.

Residents are strongly influenced by the added advantages that Mayfair has to offer in leisure, retail, cultural and private offices close to hand.

Newly developed single units in Mayfair have already achieved between £4,000 to £5,000 per square foot and future developments will be offering standards and facilities expected in the international flagship market.

CLICK HERE TO VIEW THE REPORT

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