The Truth About The World's Most Expensive Apartment Building: It's A Ghost Town

one hyde park

Photo: Knight Frank

One Hyde Park, an ultra-high end apartment complex in Knightsbridge, London, is the world’s most expensive residential development.Apartments in the 86-unit building sell for around $11,270 per square foot, far more than typical residential real estate in London, which currently goes for around $1,059 per square foot.

Of course, the building’s residential makeup reflects its exclusive nature.

Arab sheiks, Russian oligarchs, and European billionaires are among the 22 nationalities represented in the complex, according to German newspaper Die Welt, which recently got a glimpse inside One Hyde Park’s closely guarded walls.

But it seems unlikely that any of these tycoons will run into each other in the building’s decadent lobby.

While 68 of the 86 residences have been sold, only three of them are registered as primary residences, Die Welt reports.

One real estate agent who shows at One Hyde Park told the paper: “Our clients call the whole world home. They will spend winters at their ski chalet, summers on their yachts in Cannes or Sardinia, and the rest of the time in their homes in the Middle East, Russia or the United States.”

Despite the fact that many units sit empty while their owner gallivant around the globe, the building has been considered a huge success, with the first 62 units selling for a combined $2.25 billion, according to real estate consulting firm Knight Frank.

One Hyde Park was conceived as a luxury residence for ultra-wealthy international buyers.

When ultra-wealthy foreigners from Russia, India, Asia and the Middle East sought to invest in property in London in the early 2000s, they were sorely disappointed by the inventory available to them.

One Hyde Park was born as a joint before between a firm owned by Qatari Prime Minister Sheik Hamad bin Jassim bin Jabr Al-Thani and CPC Group, a local development company.

Source: Knight Frank

Although other residences were built to compete with it, One Hyde Park has always been in a league of its own.

Source: Knight Frank

In 2007, its first year on the market, One Hyde Park achieved record prices.

Not content to compete with other 'prime' properties, prices at One Hyde Park hit $7,432 per square foot in 2007, the building's first year on the market.

Even the tanking global economy couldn't slow down sales.

That figure represented a premium of 188% above the prime market in London at the time.

Source: Knight Frank

The owners acted cautiously when the real estate market seized up in 2009.

Like everything else on the real estate market, One Hyde Park hit a stumbling block in 2009 in the wake of the global economic crash the previous year.

The property's owners temporarily took it off the market until the turmoil ebbed.

Source: Knight Frank

Unlike other prime developments hit hard by the crash, sales at One Hyde Park picked up in 2010 and 2011.

According to Knight Frank:

One Hyde Park's success is due to the fact that it was designed and executed to meet a very specific requirement from the new international wealthy. Not only did these buyers emerge from the recession almost unscathed, but so too in some ways did central London.

Source: Knight Frank

In fact, the world's most expensive home was sold there earlier this year.

In April, Ukrainian billionaire Rinat Akhmetov reportedly bought the penthouse apartment at One Hyde Park for $221 million, making it the world's most expensive home (excluding the billion-dollar fortress built to spec by Indian tycoon Mukesh Ambani).

Click here to tour Akhmetov's penthouse >

Developers in cosmopolitan markets around the globe have tried to copy One Hyde Park's model, but none have achieved its level of success.

Source: Knight Frank

But global developers have learned some important lessons from One Hyde Park.

Developers looking to build 'super-prime' residences have learned:

  • To focus on international buyers
  • To pay greater attention to design and services
  • To refine their sales and marketing strategies

Source: Knight Frank

The developers of One Hyde Park expertly turned up the luxury level at the Knightsbridge complex.

  • They worked with some of the world's best architects and interior designers
  • They created large, single story apartments, which are tough to find in London
  • They contracted with the Mandarin Oriental to provide personalised services for residents
  • They included extravagant amenities like an ozone swimming pool, squash court, golf simulator and underground parking

Source: Knight Frank

Unfortunately, there's a big reason they may not be able to replicate the success of One Hyde Park anytime soon.

Knight Frank explains:

The problem is that the sites suitable for these developments are limited, and so too are the skills and knowledge required to deliver the right product. But get this combination right and the rewards can be significant.

The lack of finance available for speculative residential schemes, as well as the lack of sites in sought after locations in Knightsbridge, means that a similar scheme of the same scale as One Hyde Park will be some time in coming to the market.

Source: Knight Frank

That can only mean one thing: prices at One Hyde Park are going up, up, up.

Knight Frank predicts that residences in the iconic building, which went from $7,432 per square foot in 2007 to over $11,270 per square foot this year, could hit $16,101 per square foot by 2016.

That's an astronomical price for residential real estate.

Source: Knight Frank

Now meet a few people who could buy an apartment at One Hyde Park

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