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London properties to woo the super rich

By Rashmi Kumar

European hedge fund Orion Capital Managers plans to build one of the most expensive housing developments in London, taking advantage of the surge in demand and prices of prime property in the capital.

The investment firm, which has acquired an acre of residential land in the prime location of Chelsea, said it will build a housing complex worth around £300 million (€345 million) and spanning an area of more than 9,000 square metres.

The move comes at a time when prices of luxury properties in London have risen by almost 10% over the last year, according to the latest property index released by estate agent Knight Frank. The research, released on 1 August, shows that prices of prime properties are now 35% higher than during the post-credit crunch in March 2009.

Liam Bailey, head of residential research at the London-based property agent, told Campden: “The Orion deal is a reflection of the market trend. The super rich regard London as a safe haven for investment, with properties of gold standard. The project is a good move as it will add more prime properties to the pipeline.”

Orion, which is also building a 30-storey residential tower on the edge of the City financial district in London, is said to have paid £85 million for the Chelsea land. The location is well chosen, as the Knight Frank index shows that strongest sales are in the central areas of Chelsea and Mayfair, where values have risen by more than 7% over the last six months.

The increase in price is a result of growing demand from buyers abroad, accompanied by a shortage of available properties.

Bailey added: “The central London market is currently undersupplied and there is a dearth in luxury properties. Property developers who get their products right will see a very successful business.”