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London’s most expensive property up for sale

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Say hello to 2-8 Rutland Gate – the most expensive property in London. The building went on sale in October for US$221 million according to The Guardian, and was constructed between 1985 and 1987, according to the property’s official website.

It was initially designed as five flats, which included a flat for the property’s caretaker, and was then converted into a single-family home in 1998.

In 2020, Chinese billionaire Cheung Chung-kiu bought the property for a record US$232 million, Bloomberg first reported. According to an October report by the Financial Times, the beleaguered founder of Chinese property developer The Evergrande Group, Hui Ka-yan, is the actual owner of the property.

The official website of 2-8 Rutland Gate does not reveal who currently owns it, but states they are “an overseas family”. It was previously owned by the late crown prince of Saudi Arabia, Sultan bin Abdul-Aziz, The Guardian reports.

While the property is the most expensive in the UK capital, its interior is in complete disrepair, according to its website. The Guardian reported that it has been in a poorly maintained state since the crown prince died in 2011.

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Despite the dilapidated interior, it’s the property’s size that allows it to command such a high price tag, says Nikodem Szumilo, a professor of the built environment specialising in economics and finance at University College London.

The building is located in the affluent Knightsbridge district in central London, just south of Hyde Park.

The property is located near Kensington Palace, a residence of the British royal family and home to Prince William and Kate Middleton, and over half of the property’s windows have a view of Hyde Park, according to the BBC.

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Knightsbridge is the most expensive address in London, where property prices average US$18 million, according to the Evening Standard, citing Land Registry data.

Like much of the real estate in the district, the location plays a big role in why 2-8 Rutland Gate is so expensive, according to Christian Hilber, a professor of economic geography at the London School of Economics and Political Science.

“It’s located in one of the most desirable locations in the world. It’s next to a beautiful park, a palace and demand for these properties is extremely high,” says Hilber.

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At least five prospective buyers have toured the property since it was put back on the market, The Guardian reported.

Hilber said that because of the massive greenbelts around London and the city’s conservation policies, it’s difficult for developers to build properties, which drives up the cost of buildings like 2-8 Rutland Gate.

Home to the world’s super-rich

Queen Elizabeth and the Duke of Edinburgh with the late crown prince of Saudi Arabia during a visit to the UK in 1998. Photo: AFP

The property has been owned by various billionaires, including the late crown prince of Saudi Arabia, who acquired it from the former Lebanese prime minister Rafik Hariri after the construction mogul’s death in 2005.

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The property’s previous reported owner, Cheung, already has a massive real estate portfolio in London, including the “Cheesegrater” skyscraper, which he bought for over US$1.42 billion in 2017, according to a press release by British Land.

Several royal families from the Middle East and “super-rich” investors from the US have inquired about the property since it went up for sale earlier this month, The Guardian reported, citing sources familiar with the sale process.

Now that the prestigious address no longer looks like this, will anyone be willing to pay more than the cost of the property itself to renovate? Photo: ProAuction/SWNS

Now that the prestigious address no longer looks like this, will anyone be willing to pay more than the cost of the property itself to renovate? Photo: ProAuction/SWNS

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Szumilo said that 2-8 Rutland Gate, like many buildings in Knightsbridge, attracts a specific clientele of ultra-wealthy individuals who “are very protective of their reputation and status”.

It’s as big as an American football pitch

A mock up of the proposed refurbishment. Photo: Squire and Partners

The property has a total floor area of around 62,000 sq ft, according to its website. It’s larger than a football pitch, which means refurbishing it is expensive.

Cheung reportedly obtained permission to reconstruct and refurbish the property in 2021. The refurbishment was estimated to cost at least US$276 million, according to Forbes.

According to the property’s website, construction works were expected to begin in the fourth quarter of 2021, but it does not state if the refurbishment has since begun. The property is planned to have a triple-height ballroom and a garage that spans two floors, per a blueprint by Squire & Partners.

Szumilo said that the prospective renovation of the property will only increase its value, with 2-8 Rutland Gate expected to be worth as much as US$580 million when the property’s refurbishment is complete, according to The Guardian, citing estimates by real property agents.

But before the renovation works could begin, the property was put back on the market just over a year after it was bought.

“The owner can pay for the refurbishment themselves and then sell it, or they can sell the property without refurbishments at a discount. If it was in a better state, it would be even more expensive than what it currently costs,” Szumilo said.

A 2020 report by The Guardian said that if 2-8 Rutland Gate was renovated and partitioned into several flats, the property could be worth as much as US$900 million.

A state of disrepair

Shots of the interior of 2-8 Rutland Gate show how dilapidated it has become. Photo: Squire and Partners

Shots of the interior of 2-8 Rutland Gate show how dilapidated it has become. Photo: Squire and Partners

Several photos on 2-8 Rutland Gate’s website show the extent of the disrepair inside the property.

Before 2-8 Rutland Gate fell into a state of disrepair, the property featured 45 luxurious staterooms, 20 bedrooms, a swimming pool, a health spa and gym, and an underground garage.

When it was still owned by the late crown prince of Saudi Arabia, it was filled with extravagant interior stylings made from 24 carat gold – right down to the tissue boxes and waste paper bins, as evidenced by photos on Pro Auction Limited. The property was also fitted with bejewelled chandeliers and jewel-encrusted bidets and curtains, according to The Guardian article.

A property that nobody wants to live in?

From the bathrooms to the living rooms, it’s been more than 15 years since anybody lived in the property. Photo: Squire and Partners

From the bathrooms to the living rooms, it’s been more than 15 years since anybody lived in the property.

The property at 2-8 Rutland Gate has been owned by several different individuals in the past few decades, and its ownership is likely to continue changing hands.

According to the property’s proposal brief, an overall reduction in floor area is expected as the refurbishment includes repair, partial demolition and alterations to the building’s facade.

But the reduction in size is unlikely to dissuade prospective buyers from snapping up the property as it’s located in one of the most desirable real estate markets in the world, Hilber said.

“Property prices are determined by demand and supply,” Hilber said, adding that there’s no shortage of wealthy individuals looking to own properties in London, especially in areas like Knightsbridge, which is close to the political centre.

Szumilo believes that the ownership of 2-8 Rutland Gate will continue to change in the future as it’s not a property that is a “primary residence where their family will live in forever.”

“This is a vehicle for people to park their money temporarily or a long period of time. It’s more of an investment property rather than one that is occupied by the owner,” Szumilo added.

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