London's Shard homes create record price gap - Toronto Star

LONDON—The sale of 10 apartments in London's Shard skyscraper this summer will break two records: they will be Europe's highest homes and will also create the world's most unequal neighbourhood for house prices, new research has shown.

The apartments are spread over 13 floors in the 1,017 feet-tall Renzo Piano-designed glass spire that has become the most dramatic addition to the capital's rapidly changing skyline.

The flats will likely sell for between 30 and 50 million pounds ($57 and $80 million Canadian) each and could attract buyers from Russia, the Middle East and Hong Kong.

This puts them in the same price bracket as One Hyde Park in the upmarket Knightsbridge area, Europe's priciest homes to date. The one-billion pound development with Candy and Candy-designed interiors is located near the Harrods department store.

At around 520 pounds per square foot, the average price in the SE1 postcode surrounding the 95-storey Shard is less than a tenth of the 5,000 to 6,000 pounds per square foot the new apartments are expected to fetch.

The district around the Shard on the south bank of the river Thames is not one of the capital's smartest, although it has come up in the world since the time when it served as a model for the slums in the novels of Charles Dickens.

"You don't get this pinnacle of value in relation to the surrounding district in any other city in the developed world," said Yolande Barnes, director of residential research at property consultancy Savills, which carried out the research for Reuters. "It's the equivalent of building the Shard in Harlem."

The Shard has divided opinion. Some see it as an excitingly modern London landmark, while the United Nations cultural body UNESCO said the Tower of London's world heritage status was at risk because the skyscraper compromised its "visual integrity" on the skyline.

There have also been complaints that from certain angles it dwarfs one of London's most famous landmarks, St Paul's cathedral.

Columnist Giles Coren, writing in The Times, described the Shard as an "engorged rectilinear monument to fat-cattism" that has been "dumped directly behind St Paul's".

The price gulf between the Shard and its environs is symptomatic of a two-tier London housing market that is fuelled at the top by wealthy overseas buyers seeking to benefit from the weakness of sterling and shield their money from global financial volatility.

Prices for the best central London properties have risen 44 per cent in the last three years, more than twice the increase across the capital as a whole, property consultant Knight Frank said.

A growing number of foreign billionaires and a shrinking middle class could hurt the British economy by curbing social mobility, economists believe, producing an uneven distribution of wealth more typical of countries such as Nigeria or Brazil.

A study by the government's Department for Work and Pensions shows central London is Britain's most unequal region. It found that inner London had 30 per cent of those in the poorest fifth of the population, 27 per cent in the richest and just 12 per cent in the middle bracket.

A spokesman for the Shard, which is being developed by London-based entrepreneur Irvine Sellar and funded by the state of Qatar, said it would act as "a magnet and catalyst for regeneration" and one local estate agent said its towering presence had already boosted interest in nearby homes.

"The Shard is a fantasy land of its own in a district with some pretty grotty areas," Sean Mcmahon of Field & Sons told Reuters. "It has definitely increased demand and brought in interest from overseas."

The flow of overseas money will benefit London by speeding up the regeneration of some areas, said Savills' Barnes, describing the Shard —which will also contain offices, a hotel, a spa, shops, restaurants and public viewing gallery — as "an international piece of real estate in a hitherto local market".

But developments only benefit their surrounding neighbourhood if they are not gated off or isolated and the regeneration of whole neighbourhoods can take years, she said. "It's one thing to achieve value at a great height but quite another at street level."