From The Evening Standard:
… Chelsea property experts said the sites could be worth as much as £1 billion when fully developed.
Ed Mead of agents Douglas & Gordon said the 3.5 acres would sell for up to £350 million — some £100 million an acre — but would be three times as valuable after being built on.
£100 million for one acre* (4,840 square yards) = £200,000 per square yard.
£200,000 per square yard = £150 per square inch.
That's like a knee-high stack of £1 coins on each square inch.
* In contrast UK farmland sells for up to £10,000 per acre for the best stuff.
Friday, 8 November 2013
£150 per square inch.
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12 comments:
Is that a tyical breakdown that the selling price of a house is 2/3 house price and 1/3 the land price.
I wonder why they sold it rather than leasing it.
- a hostpital could do with a cash flow income
D, across the UK as a whole and on average, it's two-thirds location and one-third bricks and mortar.
But the median is more like half-half, it's incredibly skewed by the top tenth or so which is nearly entirely location value, the bricks and mortar element is negligible.
D, re leasing, that was my first thought, that way the hospital has got £40 million a year net rental income, index linked and forever. What they get now will just be squandered on vanity projects and disappear.
Didn't Lewis Carroll capture this perfectly in Alice Through the Looking Glass. As I recall, Alice is unable to show her ticket to the Guard as there was no ticket office; as the chorus of voices explains there was no room as the land was worth a thousand pounds an inch (as well as the engine's smoke being worth a thousand pound a puff). Current land economics in one.
RT, yes, but as it happens, in commercial terms that land is worth that much because people are willing to pay that much. A lot of people would love to live in Chelsea (don't ask me why, but they do) and are prepared to pay for it.
"What they get now will just be squandered on vanity projects and disappear."
Indeed, which is why the Grosvenors are now super-rich and their fellow peers who owned land round London in the C18th are not. They leased and the others sold.
"That's like a knee-deep stack of £1 coins on each square inch."
Or covering the whole area with pound coins to a depth of just over 13".
B, I looked it up.
A £1 coin is 3.15 mm thick.
150 x 3.15mm = 47.3 cm.
47.3 cm = 18.6".
They are also slightly less than 1" wide (22.5 mm).
Yes, but if you are covering an area with pound coins, they fit together like a honeycomb and you get one and a half coins to a square inch. (A triangle whose sides are equal to the diameter of the coin, will contain three segments of coin, each one sixth of its area. These triangles tessalate, therefore each coin takes up an area represented by two of these triangles. From this you can work out the number of square inches per coin and hence the number of coins per square inch.)
B, yes. Having laid out some pound coins and measured the size of the hexagon, I can confirm that the area required per coin is about 0.68", so 13" deep sounds about right.
But I was talking about £150/square inch not (smaller amount) per regular hexagon with side length 0.55".
It doesn't matter if you have one tower of 150 coins on each square inch or you have pound coins piled 100 deep in a honeycomb pattern, your money density is still £150/in sq.
B, I meant it literally, i.e. on each square inch there is £150, not in a hexagonal pattern, so there'd be bigger gaps and the columns would be higher.
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