5.5 Billion of London Real Estate is owned by one person. It's not who you think it is!
One of the biggest real estate moguls in London is the president of the United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan. The Guardian revealed last week that they own about 5.5 billion euros in real estate in the city. It covers the streets and buildings of Mayfair, Knightsbridge and Kensington, and perhaps even more valuable than the London properties of the Grosvenor Estate, which are surpassed only by the Crown.
For a foreign head of state to secretly own so much property in any capital is strange and probably worried about security. If his regime is dictatorial and believes in the use of torture, enforced disappearances and the imprisonment of government critics, it should be strangely inappropriate. Imagine the outcry when the owner was revealed as Vladimir Putin or Kim Jong-un.
It goes without saying that the accumulation of the estate has been largely taken out of sight. The properties were bought by bogus companies in offshore paradises. Exactly why the sheikh should want so much wealth in London as the monarch of Dubai and Abu Dhabi is a mystery. This suggests a strange personal insecurity.
The main property in Khalifa is one Kensington Gardens near the Royal Albert Hall. The site was acquired in 2008 for 320 million euros by the Candy brothers, who had bought it two years earlier for 69 million euros. It was a classic example of an obscene London property agreement in which prices are high and weak planners are afraid by sacrificing historic areas for the welfare of "starchitect" buildings, here by David Chipperfield. Needless to say, the apartments have been almost completely empty for five years since they were completed in 2015, a waste of space and just a monument to the vanity of a Gulf autocrat.
Boris Johnson, as Mayor of London, was wild for all this. In 2014 he even flew to Kuala Lumpur to promote the conversion of the Battersea power station in London. He called foreign radio money "income investment," although he did not pay a dividend to London. In 2016, the Guardian reported that only 30 of the 214 flats in the Vauxhall Tower were on the electoral roll. The Times found that 99.3% of the flats in the last round in Manchester belonged to foreign investors.
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These acquisitions are not foreign investments at all, except for real estate agents. They do not add anything to the British building stock because they are so often empty. They might as well be warehouse shelves in a bank. Nevertheless, they suck the vital element of their quarters. They don't spend anything at the local level and they kill the communities. An evening walk through the new clusters of London reveals floor on the floor of the unlit room. A third of Bishops Avenue in Hampstead would be empty, some of which are half deserted. Entire streets of Kensington and Chelsea are closed and dark. It should be a squatter's paradise - and who could complain?
I respect the sanctity of property, but the houses are a special kind of property, property within a community. As such, goods such as these should be regulated, taxed and subject to a certain sense of public obligation. London owners have shown concern in the past about the vitality and appearance of their streets. Walden's Howard estate retains Marylebone's identity, as the Crown does on Regent Street. Owning a land in a city is part of that city's life cycle. However, one of the reasons why foreign buyers prefer tricks is that they do not mention such a concern. They are imprisoned, anonymous, the antithesis of what an urban community should be like.
It is scandalous that the London government agrees - and even encourages - this anti-social behaviour, in the case of Johnson. The possession of blocks of property outside the market for years at the end should be prohibited. The leadership in London claims to be in favour of building more houses, but they ignore the houses that have not been used. When Islington discovered that a quarter of her new homes were empty, she tried to impose the occupation under the threat of court orders and jail. He has achieved nothing. Some councils are imposing a tax surcharge on vacant homes, but a few hundred pounds extra is insignificant. Kensington and Chelsea, which house one of Khalifa's luxury buildings, are taxed at €2,473.66 a year. That would be 20 times as much as in New York.
Few other cities defend this nonsense. In New York, most cooperatives and condominiums - which cover most residential properties - need full-time residency under the threat of evictions. Hong Kong, Singapore and Canada impose high taxes on foreign buyers. New Zealand prohibits non-residents from owning property. To buy a property in Delhi, a foreigner must undertake to employ it for six months a year.
These are not illiberal controls. Modern London is the wild west of the global property market, and some of it is disfigured and dying accordingly. Manchester will surely follow. If foreign investors are not banned, at least occupancy or subletting must be applied.
A city is not an object, let alone a bank account. Those who own it should stand up for it. So that it is a stranger, absent owner should be unthinkable.