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Decision on plans to transform New Scotland Yard due early next year

The developer aiming to convert Abu Dhabi-owned New Scotland Yard into luxury apartments is hoping to win planning approval for the project by early next year.

The UK-listed Northacre submitted plans for the conversion of the building, which is the headquarters of London’s Metropolitan Police, in August.

The chief executive Niccolò Barattieri di San Pietro expects to get planning permission approval early in the new year.

“We have created what I believe to be an exceptional scheme, which will set record prices in the area and have the best views in London,” he said.

The site was bought by Northacre’s majority shareholder, Abu Dhabi Financial Group (ADFG) for £370 million (Dh2.04 billion) in December 2014.

Northacre is also currently in the process of redeveloping One Palace Street — a three-sided, 302,777 square feet development overlooking Buckingham Palace which will contain 71 apartments.

Mr di San Pietro said that since its soft launch in April, Northacre had sold 40 per cent of the apartments at One Palace Street at prices ranging from £2,950 to £5,000 per sq ft. The most expensive sold to date is a unit of about 4,000 sq ft for “close to £20m”.

Recent reports have suggested that the spectacular price growth in London’s prime residential property market may be coming to an end. Prices for homes in central London have shot up by about 40 per cent since the beginning of 2013, but have recently begun to slow. Knight Frank last month revised its annual price growth target down from 4.5 to 2 per cent.

A recent UBS report also argued that London is currently the most overpriced property market in the world.

Its Global Real Estate Bubble Index, which examines the affordability of homes by measuring the relationship between house prices and income, said house prices have “decoupled” from salaries.

It said that there was “risk of a substantial price correction should the fundamentals for real estate investment deteriorate.”

Mr di San Pietro said that he thought the current slowdown represented a welcome “period of pause”.

“People are concerned that growth has subsided, but if we have a couple of years of price stability it will probably help, and it will help with the disparity of income and capital values.”

He also said that demand still exceeds supply, with about 700,000 homes planned for the city, but a demand for 900,000 homes by 2030 to accommodate an anticipated population growth of 1.5m.

He said competition is likely to make life tougher for developers as the market tightens. “Product is going to become king,” he said.

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