Real Es­tate

Bil­lion­aire buy­ers are snap­ping up prop­er­ties with price tags of more than US$100 mil­lion, writes Na­dine Bate­man

Hong Kong Tatler - - Contents -

Bil­lion­aire buy­ers are snap­ping up “tro­phy” prop­er­ties with price tags of more than US$100 mil­lion

When the ro­mans said that “a man’s home is his cas­tle,” lit­tle did they re­alise their metaphor might be used to de­scribe an era when houses could cost as much as royal res­i­dences once did. How­ever, that time is now. Cer­tainly, if you shell out US$100 mil­lion for a property, the least you might ex­pect would be a tur­ret or two—and pos­si­bly a moat.

That’s the stag­ger­ing sum be­ing paid with in­creas­ing fre­quency by the wealthy seek­ing ways to in­vest amid the pre­vail­ing global eco­nomic tur­moil. For bil­lion­aires, th­ese prop­er­ties have ac­quired the sta­tus of as­sets such as a Pi­casso or a pink di­a­mond. In its 2015 re­port about the global lux­ury real es­tate mar­ket, Lux­ury De­fined, Christie’s In­ter­na­tional Real Es­tate re­veals that more prop­er­ties sold for at least US$100 mil­lion last year than ever be­fore. The com­pany’s CEO, Dan Conn, says such prop­er­ties are “a new class of col­lectibles” and calls them “tro­phy” homes.

“The buy­ers of the world’s finest homes are fre­quently the same peo­ple who have sub­stan­tial col­lec­tions of no­table art,” says Conn. “They are seek­ing pri­vacy and se­cu­rity

in their prin­ci­pal res­i­dence, but all pur­chase with a view to how th­ese homes will ac­com­mo­date the other as­sets they have a pas­sion to col­lect. They are viewed as rare and pre­cious col­lectibles rather than a com­mod­ity, and they carry the added ben­e­fit that own­ers can enjoy them as a life­style as­set, un­like a stock or a bond.”

The an­nual re­port by Christie’s ranks the world’s top lo­ca­tions for prime property and analy­ses more than 70 key re­gional mar­kets. It has un­cov­ered “new bench­marks at the ul­tra-high end” of the real es­tate mar­ket since 2010, which in­clude sales in East Hamp­ton, New York, for US$147 mil­lion; Côte d’azur, France, for US$146 mil­lion; Green­wich, Con­necti­cut, for US$120 mil­lion; Hong Kong for US$104 mil­lion; and New York City for US$100 mil­lion.

Cur­rently listed on the mar­ket are a num­ber of sim­i­lar prop­er­ties, in­clud­ing Sy­camore Val­ley Ranch in Los Olivos, Cal­i­for­nia, at US$100 mil­lion—you may have heard of it, as it was for­merly Michael Jackson’s Nev­er­land Ranch. The vast 1,100-hectare es­tate fea­tures a 1.6ha lake with a wa­ter­fall, and mag­nif­i­cent views of the moun­tains and deep val­leys in the fa­mous wine re­gion.

“Nev­er­land Ranch, also known as Sy­camore Val­ley Ranch, is so unique; we’ve had sev­eral of­fers,” says Jeff Hyland of Hil­ton & Hyland, a Lux­ury Port­fo­lio In­ter­na­tional mem­ber and one of the agents listing the property. “An area of 4.2 square miles of pri­vacy this close to Bev­erly Hills and Mal­ibu is a draw­ing card in its own right. The ranch is such an ex­cit­ing ex­pe­ri­ence to present to buy­ers—i be­lieve when it sells I will go through with­drawals.”

Hubs such as Lon­don, which at­tract in­vest­ment from around the world, are also listing prop­er­ties at the equiv­a­lent of US$100 mil­lion. Alex Newell, the man­ag­ing di­rec­tor of real es­tate agent Hanover Pri­vate Of­fice, says May­fair, Knights­bridge, Kens­ing­ton, Re­gent’s Park and oc­ca­sion­ally Sur­rey are where English res­i­dences of this value are likely to be found.

“That ask­ing price is no longer rare,” says Newell. He’s re­luc­tant to re­veal the ex­act num­ber of prop­er­ties his com­pany is cur­rently sell­ing at that fig­ure, cit­ing client con­fi­den­tial­ity, but says, “We fre­quently are plac­ing of­fers for more than £50 mil­lion [US$75 mil­lion]. It hap­pens on a bi­weekly ba­sis.”

Own­ers of th­ese prime prop­er­ties gen­er­ally don’t want pho­tos and de­tails of their homes in the pub­lic do­main, and po­ten­tial pur­chasers are of­ten asked for fi­nan­cial state­ments be­fore view­ing to prove they’re not time-wasters. In th­ese in­stances, the prop­er­ties may be on what’s dubbed “whis­per listings” in the in­dus­try—those that are for sale but not of­fi­cially listed.

“With Sy­camore Ranch, the owner specif­i­cally said the fewer show­ings, the bet­ter. I re­ceive a re­quest ev­ery week and turn down peo­ple who don’t show US$100 mil­lion of liq­uid as­sets on hand,” says Hyland.

Off-mar­ket sales are com­mon in the su­per-prime mar­ket—and at this level, con­fi­den­tial­ity is al­most as im­por­tant as the deal it­self, ac­cord­ing to Michelle van Vu­uren, man­ag­ing di­rec­tor of res­i­den­tial de­vel­op­ment at Sotheby’s In­ter­na­tional Realty in the UK. “Both ven­dors and buy­ers will find a more tai­lored ser­vice at the top end of the mar­ket. At UK Sotheby’s In­ter­na­tional Realty, we repli­cate the Sotheby’s auc­tion house’s ‘white glove’ sales ap­proach—in the same way they han­dle each jewel or piece of art with metic­u­lous care, we fol­low this ethos when deal­ing with the sale of a property,” she says.

Moats and tur­rets may be in­cluded, but the key fea­tures of a property with such a hefty price tag tend to be far more prac­ti­cal. “Lat­eral space, build qual­ity—ar­chi­tects and de­sign­ers such as Robert Adam, Quin­lan Terry, Nor­man Foster, Richard Rogers and David Chip­per­field,” says Newell. He cites “must-have” fea­tures at this level as a large gar­den in cen­tral Lon­don, to­tal pri­vacy or a sin­gle property of more than 30,000sqft. Pen­t­houses and large, de­tach­able prop­er­ties in ex­cep­tional lo­ca­tions are also highly sought af­ter.

“Like pieces of fine art, the value of tro­phy real es­tate is a com­bi­na­tion of rar­ity, prove­nance, con­di­tion and ameni­ties. With


real es­tate, we add lo­ca­tion,” says Conn, whose com­pany is cur­rently rep­re­sent­ing a property in the Palm Beach area of Florida with an ask­ing price of US$100 mil­lion.

The global fig­ure for such prop­er­ties sold last year is es­ti­mated to be less than 20. How­ever, the num­ber of bil­lion­aires con­tin­ues to rise world­wide—and, with it, the de­mand for one-of-a-kind real es­tate. “Ul­tra-high-net­worth in­di­vid­u­als have been ac­quir­ing tro­phy real es­tate as­sets across the globe for some time and we ex­pect that this will con­tinue for the world’s wealth­i­est in­vestors,” says Conn. “With such a lim­ited sup­ply of US$100 mil­lion-plus homes avail­able on the mar­ket at any given mo­ment and a sig­nif­i­cant num­ber of [the world’s wealthy] fo­cused on this emerg­ing as­set class, we ex­pect the sales in any year to be af­fected more by idio­syn­cratic pur­chaser pref­er­ences than the broader mar­ket con­di­tions.”

The next big mile­stone—the half-bil­lion­dol­lar mark—is prob­a­bly just around the cor­ner. Hol­ly­wood film pro­ducer and property de­vel­oper Nile Ni­ami is re­ported to be set­ting an ask­ing price of US$500 mil­lion for his lat­est project: a 100,000sqft property in Los An­ge­les that in­cludes a 5,000sqft mas­ter bed­room, a 30-car garage, a 45-seat Imax cin­ema and a “Monaco-style” casino. But no moat.

plush path­ways Wealthy in­vestors highly value the pri­vacy and seclu­sion that come with large land­scaped es­tates

wa­ter wa­ter every­where This US$100 mil­lion home on Florida’s In­tra­coastal Es­tate boasts swim­ming pools, foun­tains and ocean views

liv­ing large Sy­camore Val­ley Ranch (for­merly Michael Jackson’s Nev­er­land Ranch) is a sprawl­ing es­tate with a fairy-tale charm that will set its buyer back around US$100 mil­lion

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