Prime Central London (PCL) was hit harder by most than the pandemic, as international buyers stayed away (due to Covid travel restrictions) and the economy experienced a major dip.
However, now that the pandemic is seemingly easing and travel restrictions are gradually being phased out again, what does the future hold for the very highest end of the market?
Here, in this Q&A, we speak to Richard Bosson, director at Caudwell, for his thoughts on what makes a great residence, the increasing importance of sustainability and why PCL - despite accusations of being irrelevant to anyone but the super-rich - actually has a crucial role in the smooth running of the whole property market.
You work alongside your long-term business partner John Caudwell, can you tell us a bit more about this relationship, and when it first began?
I consider John to be a very good friend in addition to a business partner. I first met John in 1992, 30 years ago now. I’d come from a very corporate environment and worked as a chartered engineer by profession, and was being fast-tracked through a corporate company. At that time, I was frustrated by the slow pace and procedural aspects of the corporate environment.
When I met John, I was overwhelmed by his adventurous, go-get-it entrepreneurial attitude, so I joined as Operations Manager at Caudwell Communications, latterly known as Phones 4u, in 1992. I progressed through the business, becoming Group Property and Purchasing Director, and over time grew closer to John as our views aligned.
After Phones 4u sold to private equity, Caudwell was established in 2007 with a clear vision of creating the finest residences in the world with a lasting legacy. Our first acquisitions for Caudwell were in commercial assets, investing over £100 million in a portfolio across the UK, then in 2011 we purchased our first major residential asset – a highly sought-after development site in Mayfair – Audley Square.
Shortly afterwards, in 2014, our second major development opportunity, the Provençal portfolio, was purchased with Le Provençal at its heart. The portfolio is spread across Juan-les-Pins and the Cap d’Antibes and includes our completed developments, Parc du Cap & Les Oliviers and La Belle Etoile which is under construction.
You say you are delivering some of the finest residences in the world, what metrics do you use to judge this?
There are two main criteria for this. The first is to acquire the best site. The site is something that is immovable. You’ve either got the best super prime location without the constraints that allow you to build the finest building, or you haven’t.
Our Audley Square site is located in Mayfair, the epicentre of super-prime central London. The area is filled with character, charm and all the amenities you require on your doorstep - the best site in London by all metrics.
(Audley Square, Mayfair)
We also have a huge starting advantage over other sites, as we have a completely cleared site and are not encumbered by existing structures in any way. Our professional team have been completely free to design a new building with quality being the highest priority.
The second part of the equation falls under three sections: design, functionality and quality. To deliver a building with the most beautiful design, you need the finest designers. It’s easy to pick commonly respected designers, but to make something that is outstanding and leaves a legacy, you need to scour the world for the best designers.
The building then has to be perfectly functional from the layout to the facilities to the seamless way everything works, exceeding even the most decerning buyers’ expectations. Quality is a massive focus for us. Very simply, everything must be absolutely perfect. No ‘ifs’, no ‘buts’, no compromise EVER!
How important is it to build a legacy when it comes to property development?
For many developers, it’s not important. Most property developers are in the business to build properties, make a profit and build the next one, that’s the nature of property development. For Caudwell, the answer to this question is very different. We have deliberately set out to create the finest residential developments in the world, and part of that is creating a legacy.
Our hope is that the buildings we create will be looked back on in 300 years’ time and still be recognised for their breath-taking beauty, timelessness, elegance and quality.
Has sustainability become more important in the years you’ve been working in the sector?
I do think the market has shifted in recent years and it has become increasingly important. For Caudwell, sustainability, and the green credentials of what we create, and of what our customers buy, has always been a key driver. It is an important part of our ethos.
An example of this is the use of ground source to heat and cool the residences at Audley Square. The old ‘green’ solution was combined heat and power but that involved using significant amounts of fossil fuels. No matter how efficiently you are using fossil fuels, you’re still using fossil fuels, whereas ground source is supplied by electricity.
The great thing about electricity is the opportunity to make the supply green through nuclear, wind, and solar etc. If your building relies on fossil fuels, it can never surpass a certain hurdle of sustainability. We had to push for the use of ground source, because the standard is to have combined heat and power.
What are your top predictions for the 2022 market?
The latter quarter of 2021 saw a significant uptick in interest and transactions in the super-prime market. There’s still a considerable amount of pent-up demand which has been held back by the restrictions on international travel. Provided there are no significant changes and that Covid recovery continues on the current trajectory, this is something we expect will only continue.
Crucially, this demand will be for the right product. Quality is paramount.
Why does London, and Mayfair in particular, continue to appeal to the World’s UHNW individuals, and as a safe haven for property investment?
Historically, the UK has been politically and financially stable. As the capital of the UK, London has always been a desirable place to buy and remains timeless and resilient. It is a safe place to buy and invest.
Inherently, Mayfair is the best of London. It’s even top on the Monopoly board!
For a brief period, Knightsbridge took the crown, owing to its provision of high-quality, serviced homes that UNHW buyers wanted. Now that Mayfair has got the product, it has quite rightly reclaimed its position as the pinnacle of the London market.
Why is the property industry and new development vital for the UK’s economic recovery post-Covid?
A major part of this is because the property and construction industry employs so many people. It is also a major driver for investment and supply chain flow, right through from material supply to work skills covering carpentry, stonemasonry and other fine trades.
The industry is a sponge that soaks up and drives investment and employment opportunities nationwide whilst also creating inward investment for the UK.
Will 2022 be the year in which international buyers return? And what role will they play in the recovery of Prime Central London? Will the extra stamp duty charge put them off?
With the current pent-up demand from international buyers, we see no reason that the growth we saw at the end of 2021 won’t continue into 2022.
In terms of the stamp duty, it is a negative for buyers of course, but I don’t think it will put them off. London is a safe place to buy and invest. People who buy in Prime Central London buy for the long term in one of the most beautiful and vibrant cities on the planet, something that the stamp duty won’t change.
Some have criticised Prime Central London for being on a whole other planet, with obscene levels of wealth and privilege at play, but is the prime market a vital cog in the UK property scene? What would happen if this market wasn’t operating strongly?
It’s absolutely crucial. Prime Central London is the top of a pyramid, and that pyramid is vitally important, providing job growth in highly skilled sectors. Everything about the Prime Central market is the top of that pyramid, and that pyramid is crucial for keeping those skills sets and attracting investment. This is no different to any other industry, each of which has its own pinnacle.
*Richard Bosson is the director at Caudwell