Chelsea Barracks SW126 March 2018
The Chelsea Barracks has been one of the bright spots in an increasingly difficult new development market. Units have been selling for over £4000psf and the old adage of location, location has never seemed more relevant. The 12.5 acre site has been a rocky ride for the Quataris who paid top dollars - £959m - back in 2008. The original scheme by Richard Rogers was scuppered by Prince Charles and the project put back until an alternative (not by Prince Charles’s favourite, Quinlan Terry) was agreed. The Quataris have this week issued the following release:
“Qatari Diar is committed to delivering Chelsea Barracks and producing a world class neighbourhood in SW1 with our first residents moving in to their new homes during the first half of 2019. Ground works and piling have been completed on our next phase of construction and we are considering how best to procure the subsequent building works in an increasingly difficult construction market. We are continuing to work together with all stakeholders towards an efficient and pragmatic outcome for the benefit of future residents.”
Roughly translated, this means: ‘Construction costs have gone up alongside stamp duty, prices are falling and currency moments have made material costs much more expensive. We have huge expenditure for the 2022 World Cup and along with paying too much for the site it means that our margins are wiped out and we can’t see how we can make money out of the final stages.’
If this is the case for one of the world’s truly deep pockets, spare a thought for other developers who are committed to sites that are second division with less room for premium pricing; that is just about everyone else.