From Diplomacy to Luxury

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Since 2013 foreign diplomatic missions and their residences in London have either been sold or are considering relocation in other less pricey enclaves of the city. It has been estimated that the value of these properties exceeds £3billion with no shortage of buyers. Most of these properties are located in the central areas of Belgravia, Kensington and Holland Park and will find their new purpose as luxury apartments and hotels. Several properties were sold in 2013 including the embassy of Montserrrat located in Marylebone and converted into apartments. Diplomatic missions have realised that as London has become popular for luxury real estate the value of their property has made relocation to other parts of the city more financially desirable and easier.

American Embassy

Leading the way for relocation was the decision to move the American Embassy from Grosvenor Square in Mayfair to south London. The U.S. State Department sold the existing embassy building in 2009 to fund a relocation to the Nine Elms district in Wandsworth. The Grosvenor location had served as a diplomatic mission since 1960. The property is estimated to have been sold for £800million.

The new owners have plans that will transform the property in a restoration that is expected to cost £1billion. The developers Qatari Diar commissioned architect Sir David Chipperfield to prepare the re-development plans.  The development is scheduled to begin in 2017 when the Americans move to their new Nine Elms location.

After the 9/11 attack, intimidating rows of bollards and barriers were put up, but for the new property these will be removed so as to return Grosvenor Square to an “open, expansive green space for residents and visitors to enjoy”

Approved by the Westminster Council, the redeveloped building will provide a five-star 137-room hotel including shops, restaurants, a spa and a 1000-person ballroom. The plans also show two new floors added to the listed building, with floor space nearly doubling to 45,000m2.

The plans state: “The proposed extensions have been carefully designed to respect the retained facades, drawing inspiration from Saarinen’s ideas, and are of high design quality.”

The design plans, ’The transformation centres on the preservation of the Modernist design while offering an accessible plan for its new purpose.’

The Canadian High Commission

Located at 1 Grosvenor Square the Canadian High Commission property was sold to the Lodha Group of India for £306million in 2013. The building is approximately 135,000 square feet in size. But rather than build a new diplomatic mission the embassy staff will move its operations to Canada House next to Trafalgar Square. Additional plans call for the High Commission to buy an adjacent property next to Canada House and conduct a renovation. Speaking to the Globe and Mail, Canadian High Commissioner Gordon Campbell said, “I think it’s going to work for everybody. We are going to send a bunch of money home, which is what people want, but more importantly we’re going to have a better High Commission in a better place.” He added that the sale price for the Grosvenor Square building was more than he expected. “I think it’s a very good deal for Canada.”

Lodha stated it planned to turn the building into a mostly residential development with flats valued at £5,000 per square ft. This is the first development for the Lodha Group outside India, where the company is developing more than 35million sq. ft. of property in Mumbai, Pune and Hyderabad.

Dutch Diplomatic Posts

The Dutch decided to move their diplomatic offices from Hyde Park to the cheaper Nine Elms like the Americans. This will save an estimated €185 million for the Dutch Ministry of Foreign Affairs thus allowing Dutch consulate offices in Antwerp, Chicago, Milan, Munich and Osaka from closure. The move to Nine Elms is expected to be completed in 2018. Bids for the property were initially placed at £150million by Estate agency Cushman & Wakefield, with a possible value of £500million or more depending if the 75,000 sq. ft. property was converted to an 18 unit apartment building as one early plan called for, or as a large private residence overlooking Kensington Gardens and Hyde Park.

Dutch embassy at Hyde Park

Dutch Embassy at Hyde Park

One of the big winners is the international property development group Ballymore. They were instrumental in helping to get the Dutch diplomatic mission to the Nine Elms Lane neighbourhood as part of their Embassy Gardens development. The embassy will move to a 50,000 sq. ft. site in 2017. The Nine Elms On The South Bank quotes John Mulryan, UK Managing Director of Ballymore Group as saying:

“I am delighted that the Dutch Embassy has chosen Embassy Gardens as its new home in London. Embassy Gardens has been recognised by both UK and international audiences as an exceptional one-off landmark development which will be at the heart of a new and exciting destination for central London

The masterplan developed by Sir Terry Farrell for Embassy Gardens will feature 2000 homes and a Linear Park of 130,000 sq. ft. of retail space, including Waitrose and two new bar and restaurant concepts from The Inception Group. Other amenities include the private Eg:le club with its own library and gym, the world-famous Sky Pool, a spa, cinema and business facilities.

One other diplomatic mission under consideration for a move to Nine Elms is that of the Embassy of Nepal located in Kensington Gardens. Nepal pays a fee of £1000 per year in rent for the 32,000 sq. ft. property.  Built in 1865 it was eventually made a gift to the people of Nepal for the service of the Gurkhas in the British military.

The building however has been reported to have become derelict with some estimates that the property needs at least £5million in repairs. It was once described in the Daily Mail that: ‘Toilets don’t flush, the roof needs repairs and visa applicants are greeted by the sound of pressure cooker whistles upstairs.’ Value of the property has been placed if fully restored at £180million or about £6000 per sq. ft.

Critics argue that the building has a very special relationship between Britain and Nepal and are opposed to it being sold. Major Tikendra Dal Dewan of the British Gurkha Society said in the Daily Mail: ‘There is a strong emotional side to the story. We have had a relationship for 200 years with the UK through the Gurkhas and this is a unique building to us.’

Neighbours include the residence of the Duke and Duchess of Cambridge and is located next to the road of Kensington Palace.

By Kevin Murphy: www.kevinmurphy.london

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