Maybourne bets on Parisian prestige

The Maybourne Residences Saint-Germain will be rare for all sorts of reasons.
For starters, Parisian homes with both private parking and 24/7 concierge are scarce – you could count the total number on two hands. Plus, when it opens in 2027, it will be one of the first truly branded residential developments in the city, offering hotel-style services in an historic 17th-century building. At around €60,000 to €70,000 (US$70,300 to US$82,000) per sq m, it will set a new benchmark for residential pricing in Paris.

The price tag places Maybourne – the group behind Claridge’s, The Connaught and The Berkeley – at the centre of a much larger story. Paris is reasserting itself as a contender for Europe’s business and lifestyle capital. Development remains difficult – prime buildings are tightly held, planning rules are strict and true luxury new-builds are rare. But developers are betting that demand from globally mobile buyers is on the rise, and that the ultrawealthy want more than just charm and culture: they want security, services and a product that meets the standards they’ve come to expect in New York, London or Dubai.

No free seats

We took a deep dive into the Parisian luxury residential development landscape as part of our all-new The Residence Report, out this week (p.16). The city is changing, which is prompting some soul searching; Paris has always attracted the wealthy, but it has long resisted becoming their playground.

Take Café de Flore, which famously played host to the thinkers and artists who shaped the 20th century – think Sartre, de Beauvoir and Picasso. Today, their spiritual heirs are more likely to encounter a queue than a free seat – a development causing consternation among locals who neither reserve tables nor tolerate queues.

Heavy-handed taxation in the UK has unquestionably been a factor in the rising attraction of the likes of Paris, Madrid and Milan, and many wealthy individuals are opting to hedge their bets; “A lot of people who could easily spend £20-30 million are now choosing to spend £10 million instead,” Rupert des Forges, Head of Prime Central London Developments tells us (P.18). “They still want a London base, but they’re spreading their exposure across more cities.”

None of this will matter much to Maybourne, which is aiming to turn its string of storied hotels into a global lifestyle brand. Today it might be afternoon tea at Claridge’s, tomorrow a stay at The Emory, next year a branded residence with your name on the door. Its chief operating office Roland Fasel envisions an “ecosystem” of hotels, homes and wellness spaces so personalised that, as he puts it, “the consumer really never needs to leave our world.” (P.38 for the interview). 

Detering investment

Granted, the mobility of this cohort of wealthy individuals is one of scores of factors the UK government must weigh up as it considers how to balance the books. It's clear now, however, that changes to property taxation, particularly hikes to stamp duty that began in 2021, have ramifications well beyond the property purchasing habits of the wealthy. 

Last week I highlighted new research indicating that boosting supply at the top end of the property market is more effective in improving affordability across the board than initiatives such as Help to Buy or even direct policies specifically targeting affordable housing. Additional stamp duty surcharges for investors and landlords are far from the only reason we've seen housebuilding in the capital fall dramatically, but they are among the most damaging. 

Berkeley Group touched on this theme in a trading update on Friday. Trading has been stable through the four months to the end of August, the company said, and it commended the government for demonstrating "its determination to drive national growth through new housing delivery". Yet the update came with a warning, too:

"The Government is now increasingly focused on addressing the regulatory and viability challenges facing London's housing industry, which we are confident it can resolve through collaboration with the sector and applying the same single-minded determination to deliver the necessary change that has been so successful in driving its wider planning reforms. The focus must be on de-regulation, resolving the challenges of the Building Safety Regulator and not increasing taxation over and above the Building Safety Levy introduced in the period; be this through the changes to Landfill Tax, currently being consulted upon, or further property taxation, as this will deter investment."

For more on this topic, see Tom Bill's Monday update. 

A turning point

Demand from purchasers alongside a functioning regulatory and planning system are the other drivers of housebuilding, and the former took a hit last week when scores of lenders began notching mortgage rates higher. 

Most notably Nationwide, which offers among the cheapest rates on the high street, increased rates by up to 0.2 percentage points across its portfolio, including for first-time buyers and existing customers switching deals.

"Nationwide’s decision . . . to raise fixed rates marks a turning point because they are typically the cheapest on the high street, and when they reprice, others tend to follow," Hina Bhudia of Knight Frank Finance told the FT.

We're only talking about a few tenths of a percentage point for now, and it's likely to be a fluctuation rather than a sustained move higher, but a lot will depend on incoming economic data. HSBC and Deutsche Bank on Monday pushed back their forecasts for Bank of England rate cuts; HSBC now expects the BoE to keep interest rates steady until April 2026. Deutsche Bank thinks the next cut will come in December, rather than November.

In other news...

Reeves calls wealth tax ‘unproven’ in challenge to deputy leader hopeful (Telegraph).