Can Wealthy Investors Emulate The Success Of The Cadogan Family?
Considered to be one of a very limited number of great estates in London, Cadogan Estate has been owned by the Cadogan family for more than 300 years. During this time, the value has skyrocketed, particularly in the past five years. With a total return of 17.2 percent in 2014, the estate’s value has increased by 13.5 percent to a staggering £5.2bn.
A Look At Cadogan Estates
Spanning 93 acres in London, Cadogan Estate includes one of London’s hottest retailing districts, as well as expensive residential property. High-end boutiques, including Alberta Ferretti, Fendi, Chanel, and Dior, are located next to gorgeous homes and flats, opulent hotels including Millennium Knightsbridge Hotel, high quality office space, chic salons and some of the area’s best eateries, such as Joe’s Restaurant & Bar and Piccolo Bar.
2014 Property Value Highlights
In 2014, property values within the Cadogan Estate continued to grow strongly. Offices had an annual growth of 22.2 percent, while the value of retail space showed an annual growth of 14.8 percent and residential property values increased by 11.3 percent.
In 2014, rental income improved by 6.5 percent to £119.9m. This is primarily due to London’s strong property market on both a residential and investment perspective.
2014 Acquisitions
Cadogan has a long history of enhancing the quality of its properties through refurbishment and redevelopment. In 2014, they spent slightly more than £100 million on acquisitions, including rental units on Kings Road and Sloane Street. Cadogan also purchased the Brompton portfolio, a large selection of residential properties with a history of statutory tenancies and long leases.
Entering The London Property Market
While there are several more great estates in London, including The Portman Estate, Grosvenor Estate, and Howard De Walden Estate, they have also been under family ownership for centuries. This leads to an important question. How can wealthy investors enter into the London property market?
It’s Going To Take Plenty Of Money
According to Michael Marx, the chief executive at Development Securities, finding sites in London to develop has become “extraordinarily difficult unless you’re prepared to write some pretty big checks”.
For example, Amancio Ortega, a Spanish billionaire, purchased the headquarters to global mining giant Rio Tinto PLC located at 6 St. James Square for £265 million in December 2014.
In November 2014, Joseph Safra, a Brazilian billionaire, purchased 30 St. Mary Axe, also known as the Gherkin, for approximately £725 million. This was substantially more than the original asking price of £650 million.
Act Fast And Pay With Cash
Bidding wars are not uncommon in the London property market. As a result, potential buyers have to be ready to submit a bid quickly and possibly be ready to offer more than the asking price.
In addition, cash buyers are preferred over traditional buyers. If your money is tied up in various funds, it is important to liquidate them as soon as possible.
Consider Small Properties
Some investors with a strong desire to break into the London property market are choosing to snap up smaller residential and commercial spaces in the hopes that it could lead to larger deals in the future.
With London’s economy continuing to grow strongly and foreign investors – particularly from China and Russia – ready and willing to purchase, the London property market will continue to provide excellent returns, regardless of your net worth.
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Jonathan Stephens is the founder of SurrendenInvest and has a wealth of experience in the property sector and shares his knowledge by writing for property and investment magazines.
