Q&A: Sandbanks
Why are houses on Sandbanks so expensive? The main reason is its proximity to London, which is a two hours' drive from the shore of Sandbanks. The views are also very good. Poole Harbour is the second-largest natural harbour in the world, and the area is excellent for water sports.
Has it always been as exclusive? No, believe it or not, the peninsula once looked more like a shanty town. Many of the houses, which were built at the turn of the 20th-century, had no drainage or water. The last disappeared in the 1960s. The whole peninsula was once offered for sale for £200 (Dh1,215). There were no takers.
So when did it become fashionable? In 2001 a local property agent sold a 1,200 square foot plot on Sandbanks for £1 million. He calculated the price made it the fourth most expensive home in the world per square foot and had it ranked accordingly. Property prices rose as a result. In 2005 a bungalow, which even the property agent who sold it admitted was run down, sold for £3m.
Ask anyone to name the world's most expensive places to buy property and they would reel off a list of the obvious cities. But among the likes of London, New York and Tokyo is a location that few in the UAE will have heard of.
Sandbanks, a small peninsula in Poole, Dorset, claims the fourth-highest land value by area, with average property prices at about £850 (Dh5,160) a square foot. One of the most expensive houses on the market at the moment is Harbour Watch, a six-bedroom waterfront property on a plot of less than a fifth of a hectare. The imposing white house is for sale for £7.4 million and comes complete with six reception rooms, a cinema, gym and a jetty.
"Sandbanks has a reputation for being one of the most expensive places to live in the world and Harbour Watch is probably one of the best houses on Sandbanks," says Keith Fensom, of Savills, a property agency. "There aren't many as big as this. It's about 11,000 sq ft and it was only built about seven or eight years ago."
The home has ample space for toys you would expect the super rich to own. One feature: a berth with hydraulic gates so the homeowner can park the boat. "You can park two boats in there," says Mr Fensom. "It also has an underground car park that can accommodate seven or eight cars."
When Harbour Watch came on to the market in 2006 the asking price was substantially higher at £11m, proof that even Sandbanks suffered during the global downturn. However, in September 2008, a Russian multimillionaire paid £5m for a house just to knock it down and then spend another £5m to build something else. And just a year later a 14,990 sq ft plot of land was put on the market for £13.5m - almost £10,000 per sq metre.
Top 5: most-expensive houses for sale on Sandbanks
1 Solaris, a five-bedroom beach-front home, £9.7m
2 A five-bedroom waterfront property, £7.9m
3 Harbour Watch, £7.4m
4 A double plot with planning permission for two houses, £6.2m
5 A plot with planning permission for a house, £5.9m
Source: Tailor Made Estate Agency
The Quote: This place makes the American gold rush of the 17th century look like an oasis of calm, measured prudence. Piers Morgan, the TV show host, on the Sandbanks peninsula
gduncan@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
