The Mayfair mansion that’s been empty for 14 years

As temperatures plummet to sub-zero and over a thousand people sleep rough on London’s streets, Who Owns England can reveal the Mayfair mansion that’s been empty for 14 years.

Moreover, it transpires that the property is on a long lease to the son-in-law of the President of Kazakhstan, a noted kleptocracy, who has been holding onto the mansion in a bid to secure the valuable freehold from the Grosvenor Estate.

No. 41 Upper Grosvenor Street is an impressive Georgian townhouse bought by a mysterious offshore company for £28.5 million back in 2007, at a time when it had already been empty for several years. The Guardian noted in 2009 that “…the handsome twin townhouses at Nos 41 and 42 have both been empty for around five years [ie since 2004].”

Visiting the mansion at the weekend, Who Owns England found the property was still clearly vacant, its letterbox taped up, with a notice next to it reading: “NO POINT JUNK MAIL IN EMPTY BUILDING.” Post had nevertheless piled up inside the dusty front door.

IMG_4894

The owner of No. 41 since 2007 has been Merix International, a company registered in the British Virgin Islands (BVI), a well-known tax haven. Here’s the land title.

For years the ultimate owner of Merix International was an enigma. But in 2016, as part of a wider investigation, the Times (£) revealed its true controller: Timur Kulibayev, the son-in-law of the Kazakh President – and a billionaire oil magnate who’s the third-richest person in Kazakhstan.

Timur_Kulibayev

Image: Timur Kulibayev. Source: Foreign & Commonwealth Office, public domain.

The link was uncovered thanks to a long-running investigation by the Times and its Sunday sister paper into a strange property deal involving Prince Andrew. Journalists had been sniffing around the 2007 sale of Prince Andrew’s Sunninghill mansion in Windsor to a mysterious anonymous owner, and discovered it to be the Prince’s friend and hunting partner Timur Kulibayev – who paid £3m more than the asking price. Sunninghill lay empty ever since, and has recently been demolished. Commentators have asked whether the extra payment had been to buy political access, something always denied by both parties.

But it also later transpired that Kulibayev, via his network of interlocking offshore companies, had bought the long leasehold on 41 Upper Grosvenor Street too. This article recounts the complex web tying Kulibayev to No. 41 via his companies Unity, Merix, Kipros Ltd and Kipros LLP.

So why did the son-in-law of the President of Kazakhstan pay a small fortune for a lease on a Mayfair mansion, only to leave it empty for years?

There are two obvious reasons.

Firstly, London’s property market continues to be a sure-fire bet for any investor with a few million to spare. If you live in London, you don’t need a graph to tell you how insane house prices are; but the graph below by estate agents Savills shows just how overheated it has been in the capital even since the credit crisis.

savills London house prices since recession

As a Mayfair estate agent just around the corner from No. 41 Upper Grosvenor Street puts it in some promotional material that I picked up: “Don’t wait to buy in Mayfair. Just buy in Mayfair and wait, because the best is yet to come.”

IMG_E4913Source: Wetherell, a Mayfair estate agent.

Secondly, Mr Kulibayev appears to have been holding on to the lease for long enough to buy out the valuable freehold.

In 2017, Merix International won a court case with the freeholder, the aristocratic Grosvenor Estate, entitling them to buy the freehold of the property at No.41 under the terms of the 1967 Leasehold Reform Act. This was despite it being left empty for 13 years at the time of the court case. Legal observers concluded from the case, significantly, that “Just because this property looked internally like a derelict office, did not mean that it was not, in fact, a house. The tenant of this derelict building was therefore entitled to exercise its right to buy.” Freeholds are of course worth more than leaseholds.

There are thousands of empty homes in central London, many of which – as Who Owns England and the Guardian has previously revealed – are owned by wealthy businessmen, oligarchs, sheikhs and offshore corporations.

Enough is enough. London’s housing crisis has reached breaking point. Homeless people are literally dying on our streets. An entire generation is being left unable to afford homes. And yet we continue to tolerate wealthy billionaires using London properties as mere investment assets, content to leave them empty for 14 years, just to turn a profit.

At the bare minimum, Westminster Council must start charging the owners of empty properties a 100% council tax premium – powers granted to councils in last November’s Budget. And Councils that fail to do so should be held to account in this May’s London council elections.

The Land Justice Network is organising a tour of some of London’s empty homes, including 41 Upper Grosvenor Street, on 14th April 2018. Join them to find out more about who owns London and call for change to end the housing crisis. Details on Facebook herewww.landjustice.uk 

3 thoughts on “The Mayfair mansion that’s been empty for 14 years

  1. Very interesting as ever. Do you have any information on which councils are taking up the 100% council tax premium on unoccupied properties?

    Like

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