Is Trump right to call US embassy in London a ‘bad deal’?
- US President Donald Trump has cancelled planned trip to London
- Blames his dissatisfaction with the new US Embassy which opens next week
- Trump tweeted that the old embassy in Mayfair had been sold for 'peanuts'
- UK Land Registry documents reveal that it was sold $431million (£315million)
- Figure is far below the estimated $687 million (£500m) experts had estimated
- The new embassy in London's Nine Elms on the Thames has cost $1bn
Published: 04:43 EST, 12 January 2018 | Updated: 16:18 EST, 12 January 2018
President Trump's claim that the US Embassy in London was ‘sold for peanuts’ appears to have been vindicated after documents reveal that it went for just £315m ($431m) – far below the £500 million ($687 million) experts estimated.
When it was sold five years ago property experts said that the market value of the deal was £500m ($680m) and it was thought that this was the sum achieved.
However official Land Registry records reveal that the 999-year lease of the land was actually sold for almost £200m less than expected.
Shiny and new: The US government has spent £750m ($1bn) on building the new London embassy in Nine Elms near Battersea
Old gold: The Qatari royal family's property arm bought the old US Embassy in Mayfair for $431million (£315million) and is transforming it into a luxury hotel
Then and now: The location of the old embassy in Grosvenor Square compared to the new one in Nine Elms
He's got a point: Documents show Trump's description of the sale as 'peanuts' may have some truth, with the sale price far below what property experts had believed it to be
This is the lease document for the existing US Embassy in Westminster. The lease dates from Christmas Day 1954 and lasts for 999 years
Land Registry documents revealed the central London site was sold for £315million
Winners! Qatar's then emir Sheikh Hamad bin Khalifa al Thani and his wife Sheikha Moza Bint Nasser al-Misnad were rulers when their investment vehicle, Qatari Diar, bought the mbassy for far below what property experts believed it was worth
The President claimed just before midnight on Thursday in Washington D..C. on Twitter that the reason he cancelled his trip to London to open the new embassy is because 'the Obama Administration sold perhaps the best located and finest embassy in London for "peanuts," only to build a new one in an off location for 1.2 billion dollars. Bad deal.'
English property law means that the Duke of Westminster, one of the UK's wealthiest men, owns the land underneath the old embassy.
The current duke's great uncle, the 4th Duke of Westminster, sold the US government a lease on the land where the former embassy, which opened in 1960, stands.
Standing in London's Grosvenor Square, in the heart of Mayfair, itself the wealthiest part of the city, the old embassy was bought by Qatari Diar – the property development arm of the Qatari royal family – in 2013.
The Qataris will now spend $1.4bn (£1.08bn) to refurbish the building and turn it into a five-star Rosewood hotel with 137 bedrooms.
President Trump, pictured today speaking at the White House, took to Twitter to accuse the Obama administration of selling the existing US Embassy for 'peanuts'
President Trump has cancelled his planned trip to London over what he labelled a 'bad deal' regarding the new US Embassy
The President was pictured holding up a proclamation honoring Martin Luther King Jr in Washington today as the fallout from his UK snub continued
New digs: The Canyonlands Garden, which represents the Grand Canyon and the south west desert landscapes of the United States, is seen in the new US embassy
Grand: A woman walks past the consular and visa section during a press preview of the United States Embassy building in December
Old times: The interior of the old US embassy building in Grosvenor Square is seen in the 60s
Special relationship: One of the rooms in the old embassy, which will not become a hotel
|OLD: GROSVENOR SQ||NEWS: NINE ELMS|
Architect: Eero Saarinen
Storeys: Nine (three under ground)
Size: 225,000 square feet
Employee capacity: 750
Distinguishing feature: A gilded aluminum bald eagle with a 35ft wingspan on the roof
Nearby landmarks: Hyde Park, Picadilly Circus, Oxford Street
Architect: Kieran Timberlake
Size: 518,000 square foot
Employee capacity: 1,000
Distinguishing feature: It is surrounded by an 8ft-deep, crescent-shaped, moat
Nearby landmarks: Battersea Power Station, Tate Britain, Battersea Park
The new £750m ($1bn) embassy is much further from the attractions of central London in a former working-class area called Nine Elms.
Shortly before the sale, the old embassy was given Grade II listed status, which in UK law makes it virtually impossible to significantly alter it.
That means any developer is restricted on what they can do to maximise value from the site but knocking down the building and starting again.
When the new embassy was purchased, the prime consideration was security after a dramatic overhaul of US embassy protection around the world.
The Nine Elms site was large and relatively cheap, but the building itself is vast, heavily protected and designed to be future proof. The total cost was £750 million – $1 billion.
Christian Warman, director of central London estate agency Tedworth Property, said that US may have 'sold the family silver' when it comes to leaving the site in Grosvenor Square for the Nine Elms site criticised by President Trump – but that they had sold high and bought low.
'Grosvenor Square is one of London's finest addresses and the embassy was very prominent and hugely well connected to businesses and professionals who live and work in the area,' Mr Warman told MailOnline.
'However, the site is very small and the security around it required can be disruptive to people and traffic in the area.
'The site they have bought is in one of London's up and coming areas and they would've sold the embassy near the peak of the market in an area where prices had risen massively.
Not happy: The US President claims the reason he cancelled his trip to London is because 'the Obama Administration sold perhaps the best located and finest embassy in London for 'peanuts,' only to build a new one in an off location for 1.2 billion dollars. Bad deal'
Sorry Theresa: The President reportedly spoke to the Prime Minister as recently as last month and spoke about his upcoming trip
'They would have bought the Nine Elms site a long time ago, so you essentially they sold at the top and bought at the bottom.'
'In terms of whether the Americans have sold the family silver; yes Mayfair is always going to be a prime hub of London, and right now Nine Elms isn't, but it could become a very important business and residential area by end of the first quarter of this century. Not least as a result of the American embassy going there. '
'It's not unthinkable that Nine Elms will be considered prime central London in ten, 20 or 50 years, so you could argue that it's a good deal for America.'
The new US Embassy is a distinctive 12-storey, cube-shaped building, located between Vauxhall and Battersea in south-west London, and has been designed by Philadelphia architecture firm Kieran Timberlake.
The embassy website says that the project 'has been funded entirely by the proceeds of the sale of other US Government properties in London, not through appropriated funds.'
Today, a removals van was pictured outside the US Embassy in Grosvenor Square in central London
Embassy staff are gearing up to move out of the current embassy in favour of the new building in Battersea
The move comes as Donald Trump cancels his planned trip to the UK, blaming dissatisfaction with the move to the new embassy
Removals workers were pictured wheeling out several items from the current embassy today
The new embassy in London's Nine Elms on the Thames has cost $1billion. Removals staff were pictured hard at work today preparing for the move
The former US Embassy on Grosvenor Square in London's Mayfair, which Mr Trump has described as 'perhaps the best located and finest embassy in London'
New front: An artists impression of what the new five-star Rosewood hotel in the old embassy will look like after the $1.4bn (£1.08bn) refurbishment
Update: The Grade II listed building will be turned into a 137-room luxury hotel, with development set to start later this year
Trump claimed the new embassy is in an 'off location'. It is located within a 561-acre regeneration project set to transform one of the South Bank of the Thames' last remaining industrial stretches.
It includes an extension of London Underground's Northern Line, with two new stations at Battersea and Nine Elms due to open in 2020.
Developers hope the area will become a thriving business hub, with Penguin Random House UK and Apple set to open offices nearby, while the Royal College of Arts has submitted a planning application for a £50 million state-of-the-art building.
They hope the project will bring to the area thousands of new homes, 25,000 new jobs, green spaces and visitor attractions.
Despite Mr Trump publicly blaming predecessor Barack Obama (left), the US announced plans to move to the new site in October 2008 – when George W Bush (right) was in the White House
Officials have already moved into the £750million US embassy near Battersea Power Station in South London. The new building will open for business on January 16
Currently, however, much of the area resembles a large construction site, with the skyline changing constantly as the developments progress.
Trump blamed his predecessor Barack Obama for selling the old embassy but the move was actually announced in October 2008 – when George W Bush was in the White House.
However, the sale went through in 2009, when Obama was in office.
Several London embassies have been sold off as private or commercial property in recent years,.
The Former European Council of Foreign Relations near St James's Park was sold for £21.5million to Galliard Homes in 2013.
In the same year, the Canadian High Commission in Grosvenor Square, directly beside the former US embassy, was sold by the Canadian government to an Indian property developer, and the Brazilian Embassy, also in Mayfair, went for £40million.