Monday, November 21, 2011

One Hyde Park: another offshore island in London?

From the Treasure Islands site:

The Sunday Times has a great story (behind a subscription wall, unfortunately) about One Hyde Park, the most expensive apartment block ever built anywhere on Earth.

The story starts by describing how ony 62 properties in One Hyde Park have been sold, four years after it went on the market, leaving a third or so unsold. Only nine of those have registered for Council Tax (indicating how many people actually live there) while the electoral register lists nobody at all. What has gone wrong?

Critics . . . argue that One Hyde Park is simply the wrong building in the wrong place at the wrong time: the ultimate symbol of an era of unrestrained, private greed that now, in times of we’re-all-in-this-together austerity, is outdated, unwanted and destined to remain unloved.

Well, few would argue with that. Style-watcher Peter York called the building

“a great big global money Monopoly chip, an asset class, a bullion bar, rather than a place to live in. It has been literally twisted out of shape by the desire to achieve profitable densities. The ceiling heights seem low, and from the back it looks as if the bedrooms are shaped like Dairylea cheese triangles. The vibe is junior Arab dictator.”

One Hyde Park is not, precisely speaking, an offshore island, but the Sunday Times, after some good digging, helpfully lists the ostensible owners of the properties - nearly all of which are anodyne-looking company names providing no clues as to the real owners. These are located in Guernsey, the UK; the BVI, Isle of Man, Switzerland, Monaco, Liechtenstein, Mauritius, St Vincent and Grenadines; Bahamas; Cayman; Thailand; California; Liberia, Belize. Every one except Thailand and California (with one property apiece) is owned in a widely recognised tax haven.

The favourite location of registration by far is the British Virgin Islands, with 25 of 86 apartments registered there.

So I think this is fair comment:

Nicholas Shaxson, the economist and author of Treasure Islands, an exposé of tax havens, says developments like One Hyde Park can be such effective tax-avoidance schemes that they might as well be “offshore islands” in their own right.

Does it draw people to London, generating trickle-down? One Hyde Park isn't disused, like the UBS building taken over recently by the Occupy protesters, but still, it's not exactly humming with life. If almost nobody lives there, then it will hardly provide much to London. What it has done, however, is to further push up property prices in the UK, in the process doing nothing whatsoever for the country's ability to be productive and compete in world markets.You can just see property company Knight Frank salivating over the property's single-handed distortionary effect:

Where £1,000/sq ft was unusual a decade ago, by 2004 £2,000/sq ft became achievable, and from 2006 £3,000/sq ft became the new target for super-prime values, despite One Hyde Park having pushed through the £4,000/sq ft, £5,000/sq ft and £6,000/sq ft barriers and eventually topping £7,000/sq ft.

All in all, it is a stunning symbol of the excess, raw cynicism, artificiality, market distortions and sheer opaque lifelessness of offshore finance.


Blogger Physiocrat said...

This property on a prime site would yield a tidy sum if we had land value taxation - and it could not be lost to any tax haven.

11:11 am  
Anonymous Carol Wilcox said...

Note that a single occupant of a One Hyde Park property pays the same council tax as my Polish family who rent a small flat in Christchurch. The solution is a full land value tax!

4:15 pm  
Blogger Matthew Steeples said...

This building caused chaos for locals whilst it was constructed and it is just as ugly as Bowater House, the building it replaced:

5:13 pm  

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