Monday, October 01, 2007

Lifestyle: UK Vogue: New York versus London

UK Vogue, GQ, Tatler, House & Garden Living, September 2007

Julie Earle Levine reports

Picture this. Five hundred of the wealthiest names in New York dancing en-masse in the lobby of a bank on Wall Street. Beyonce is singing on stage surrounded by lithe models, billionaires with bald spots reflecting whirling spotlights, mixed with A-list celebrities. Waiters dart through the crowd with magnums of Krug and Dom Perignon. The Cipriani Wall Street Concert series raises millions of dollars for charity. But there is more beneath the gilded surface of this soiree.

It is never formally announced, but underneath the din, the powerful engine of real estate is purring. Somewhere between the scampi alla thermidor and roasted double lamb chop, concert guests (which have included Naomi Campbell, Jennifer Lopez and Margherita Missoni, among others) may be offered a chance to see the $1-million-plus condos upstairs in this converted building, and hopefully, buy one. By the end of the evening, several Cipriani Club Residences at 55 Wall Street apartments have been scooped up.

The high-end-real-estate frenzy in New York is also being played out in London, albeit in a more reserved, less glamorous manner. When considering two of the most dynamic cities in the world, the luxury property market is bound to be a cocktail of money, glamour, power, and sex. New York’s social elite and previously discreet Brits have never been so consumed with property. At dinner parties in downtown SoHo lofts, Upper East Side mansions and Kensington apartments, the conversation is peppered with juicy details on bidding wars. Who is buying where and at what price – it went for how much?!

‘The Brits talk about little else at dinner parties other than house prices. It would never happen at a French dinner party, but it happens here now all the time’ says Rupert de Forges, partner at Knight Frank LLP, which has about 200-million pounds worth of apartments and 300 million pounds in houses listed in the Knightsbridge office alone.

So what changed? Both New York and London are awash in cash, from equity markets as well as wealthy foreign investors. Hedge-fund money has fuelled the very top of both cities’ property markets.

In New York, Prudential Douglas Elliman sold $11.7 billion of real estate last year, while the other top brokerage, Corcoran, currently has $8.4 billion in listings. And in prime central London, agents have 5.5 billion pounds of residential property listed (as of 18 May) according to the trade website

In Manhattan, deals are quietly closed at the Four Seasons Grill Room, or over an espresso at downtown Cipriani’s restaurant, where brokers such as Paolo Zampolli, who owns ID Model Management and now is also a realtor, dine with potential clients. On a recent weekday, Arkie Busson, the French financier and former partner of Elle Macpherson, sauntered across to say hello to Zampolli, who later speculated he was in town to buy a house. He suspected it was through Sotheby’s, not his agency. He was not happy.

Through their various brokers, the city’s power menagerie compete aggressively for properties. ‘If someone wants a certain penthouse, condo or townhouse they simply get it any way they can – and they pay’, said Raphael de Niro, who has his own group with Prudential Douglas Elliman and is the son of the actor, Robert. Many jump in early before construction starts. Prices for luxury condos in some buildings have jumped 20 per cent since they were sold off-plan.

Just how much have prices for a gorgeous townhouse shot up in Manhattan? Nanette Lepore, a fashion designer, bought her five-and-a-half storey, 20ft-wide-and-60ft-deep brownstone in the primeWest Village district for $6.5 million in 2004 and had it completely redecorated. Then the market shot up even higher. Her property is now valued at $12 million.

On average, New York is around $3,000 to $4,000 per square foot, while London is the most expensive property market in the world at $4,000 to 6,000 per square foot. Jonathan Hewlett, director of Savills London, says he has never been busier. ‘Everyone wants to be here. The security is good, trust in financial markets is good and there is a limited supply of prime stock.’ Prices in London’s prime time market have jumped 30 per cent in the last calander year, and more than tripled since 1997.

The top end for London is 10 million pounds. Who is lining up? De Forges says the Russians represent a good quarter of that market. At the 20-million-plus pounds mark tends to be those from the Middle East, Russian, or former Soveit states, Australia and the occasional Englishman. The best properties in Mayfair, Belgravia, Knightsbridge, Chelsea, Kensington/South Kensington and Notting Hill have seen a 40 to 50 per cent growth in the past year, he said. Wealthy locals are competing with and exotic international mix for the best properties- French, Brazilian, Spanish, Cubans and Americans. But the biggest buyers in the first half of this year? ‘They are from Kazakhstan and Iceland. It is extraordinary.’

Hewlett puts the former Soviet states at the top end of the market. ‘It is the same as in the 1980s, when lots of Hong Kong, Chinese and South-East Asian investors were buying properties in London, and for their families. When you come with 5-10-million pounds and you find nothing, well sometimes budgets can double.’ Savills sold 1.7-billion pounds worth of property last year alone.

Meanwhile, the spate of new buildings in New York (more so than in London where building is more restricted) is creating hot new areas and stealing the show from upmarket neighbourhoods such as the Upper East Side. ‘The financial district is where all the money is going’, says Michael Shvo, and founder of SHVO, a marketer of condo projects all around the USA, citing the Armani building and the new W Hotel residences. Gucci, Tiffany, Hermes are on their way. ‘Wall Street will be the next Madison Avenue, as will Manhattan’s Far West waterfront.

The property boom in both cities is all about ‘lifestyle’, especially in New York where skyscrapers come with big names- Donald Trump’s new SoHo building, Jade Jagger’s apartments in Chelsea (for YOO with Philippe Starck), hotelier Ian Schrager’s first-ever residential properties, Gramercy Park and 40 Bond Street.

Ivanka Trump, Donald’s daughter, is selling Trump SoHo Hotel Condominium, a new 45-storey hotel on Spring Street that will be four times as tall as anything else in SoHO. It will have an Olympic size swimming pool and world-class spa. ‘You can’t have a luxury building now without these amenities. What used to be okay in the 1980s, such as a 9ft ceiling height, is now 10ft ceiling height minimum plus the sort of amenities you would normally find in a hotel’ says Ivanka, a former model whose uniform of construction boots with Yves St Laurent suits sums up the newfound glamour of this business.

At the Cipriani dinner, one woman likened an apartment she had just seen upstairs to a beautiful jewel box. ‘It is perfect. Everything is completely built in. The refrigerators are completely hidden. There’s African wood. I’m in love with the sinks, they are so stylish.’ But anyone shopping for jewel boxes may be disappointed. The 100-unit building is nearly sold out.