How much would you pay to live above Londons luxury retail?

Mayfair’s Sloane Street has always been a sought-after place to live, but the rise in designer retail outlets is drawing even more buyers to the area.

Mayfair’s Sloane Street has always been a sought-after place to live, but the rise in designer retail outlets is drawing even more buyers to the area.

In fact, an increasing number of buyers on the hunt for above-shop properties throughout Mayfair mean that these are now in high demand. Typically, property hunters have shied away from flats above retailers or restaurants, but recent research from local estate agents Wetherell has seen this trend reverse substantially. The findings reveal that buyers are now battling it out for apartments above London’s hottest restaurants, shops, and boutiques.

In the past, the average price of these properties was around 10 per cent less than those in strictly residential buildings. However, as the number and popularity of designer outlets have increased in the area, so too have the property values. In fact, numbers suggest that these properties can now command a premium; Wetherell research reveals that high net worth buyers on the hunt for a buy-to-let investment property or pied-à-terre could expect to pay an additional 20 per cent for properties above a shop or restaurant.

Why buyers are battling it out for above-shop properties   

While previously, apartments above shops or restaurants may have carried negative connotations, now they are a symbol of affluence and taste, according to estate agent Peter Wetherell.

“A new generation of boutique developments is being built across Mayfair and the wider West End which offer homes located above luxury brands,” he says.

“Buyers no longer see these homes as being above retail, instead… something desirable and chic, hence the transformation in values in the above-shop sector.”
This transformation is only set to continue as the development of properties above restaurants and shops soars. There are nearly 450 new homes slated for construction in the Mayfair area, of which nearly half will be above a retailer or restaurant. Some of these properties will see a sharper increase in value than others; for example, properties above luxurious establishment such as Gucci will command more than those above a take-away restaurant or high-street retailer. However, for investors, there are a number of positives to adding one of these apartments to a portfolio.

Above-amenity properties make great investments for a number of reasons. Firstly, the increasing popularity of Mayfair as a location means the demand is high for units, often irrespective of square footage. Secondly, the available housing stock - in spite of planned developments - remains low. Developers are now utilising these previously unloved spaces and transforming them into luxury rentals, providing investors with an excellent opportunity to procure a property in this trendy market.

For those looking to live in an upscale part of London close to amenities and entertainment, or for investors looking to snap up a luxury piece of real estate, the above-shop sector then presents a wealth of opportunity.

 

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