Homes close to London’s Harrods department store are so in demand that the average price within a five minute walk has soared to £2.4m – almost double the average for the borough of Kensington and Chelsea.
A report commissioned by the store’s estate agency arm, Harrods Estates, has found big jumps in value the closer a property is to the famous department store, which is located just south of Hyde Park. The average value for all residential properties sold between 2011 and 2014 within a five minute (360m) walk of Harrods was £2,149 per square foot. This is 133% higher than the London average of £921 per sq ft, and 20% above the average in the Knightsbridge area (£1,786 - the average of all properties located within a 20 minute walk of the store). A property within five minutes’ walk of the store is worth an average £2.4m, 94% higher than the £1.24m for Kensington and Chelsea.
The report on the “Harrods effect” comes after a study on the “Waitrose effect”. Last year, research by Savills found that house prices in areas with a Waitrose supermarket were typically 25% higher than the UK average, with a 50% boost in London.
Founded by Charles Henry Harrod in 1834, the Grade I-listed store, with its celebrated food hall, is now owned by Qatar’s sovereign wealth fund which bought it in 2010 from Mohamed Al-Fayed for an estimated £1.5bn. It is the shop of choice for many rich visitors from the Middle and Far East.
Shaun Drummond, sales director at Harrods Estates, said: “Even if some prefer to make the journey by limousine, the convenience of being able to walk to Harrods is a luxury, which supports even greater premiums for properties just a few hundred yards away, or less than 5 minutes’ walk. Typically these amount to a 27% differential between Harrods and locations just 1km or just over half a mile further away.”
Since 2011, nearly 2,000 homes, mostly apartments, have changed hands within a 20 minute walk (1,440m) of Harrods, worth a combined £6.1bn, the report claimed. Over that period, 215 properties have been sold within a five minute walk of the store.
The area has been popular since Victorian and Edwardian times thanks to its proximity to Hyde Park and Harrods. The nearby One Hyde Park apartment complex, built by the Candy brothers and the Qatari royals in 2011, is one of the world’s most expensive addresses where penthouses have changed hands for £140m (a one-bedroom apartment was repossessed last year and put back on the market for £5.25m, however).
“Grand new houses in Belgrave Square were the One Hyde Park of their day,” said Simon Barry, head of new developments at Harrods Estates, “and building luxury apartments and houses in the local area has continued right up to the present day.”
He added: “Some commentators have put the success of the ultra-prime residential market in Knightsbridge down to what they call the ‘One Hyde Park’ effect. However there has been a premium market in Knightsbridge for much longer than this.”
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