Rich Russians lured to ‘Britain’s Palm Beach’
Photo: Sandbanks Beach in Dorset, England. Credit: Kathy Collins, Getty Images
The U.K. is not usually seen as a prime location for the second homes for the world's rich and famous, but a growing number of Russians are shunning the traditional destinations for real estate on a strip of coastline dubbed "Britain's Palm Beach."
Sandbanks, in Dorset, England, is a small peninsula dotted with glitzy waterside properties - with price tags often running into the tens of millions of dollars. It is widely regarded as the fourth most expensive place in the world to buy property after the upscale parts of New York, London and Tokyo.
Until now, buyers of area's luxury lodgings have mostly hailed from in and around London, but there is increasing interest from overseas – and Russia in particular, according to Tom Doyle, managing director of Lloyds Property Services.
As a result, the Dorset-based real estate agency has opened a branch in Moscow, and hired a Russian employee at one of its U.K. offices to deal with the growing number of inquiries from the country.
"We've had a lot of interest from Russia, and we're expecting a lot more," he told CNBC. "There is no reason whatsoever why Russians - or anyone other wealthy individual - wouldn't want to have their trophy home here in Sandbanks."
Russian multimillionaire petrochemicals trader Maxim Demin was clearly impressed by the area. According to media reports, he spent £5 million ($8 million) on a Sandbanks mansion after buying 50 percent of Bournemouth's soccer club in 2011.
Photo: A Sandbanks property. Credit: Lloyds Property Group
And where one Russian goes, others are sure to follow, according to local real estate agent Keith Fensom. He works for Savills, which also has an office in Moscow.
"They say that Russians buy together," he told CNBC. "It's happened in London, so perhaps more will move here."
Foreigners are attracted to the area's beaches – "without doubt the best in the U.K." – its proximity to London, and numerous "brash" properties along the waterfront, according to Lloyds' Doyle.
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"People talk about living the dream. I just tell the Russians: 'the dream exists – and it's here," he said.
As well as opening a Moscow branch, Lloyds have also printed their property magazine in Russian, and listed all of their Sandbanks homes on Russian property websites.
Size doesn't matter
Real estate currently up for grabs in Sandbanks include a six-bedroomed home on the harbor front - complete with private pier - which is on the market for £7.45 million, and another water-front house with indoor pool, which has a £6.95 million price tag.
And in Sandbanks, apparently, size doesn't matter, with the average asking price for a one-bedroom property coming in at £1 million, according to property website Zoopla.
Savills' Fensom said it was these lower-priced properties that foreign buyers were most interested in.
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"We've had a number of Russian and Georgian buyers buying properties for around the £1.5 million mark," he said. "Overall, though, the number of overseas buyers is still very few."
Fensom does expect this to change, however, as Sandbanks' prestige grows. "Over the last few years, the area has become more well-known globally," he said. "Indeed, the peninsular is now quite iconic."
And it's not just Russians, but Arabs and other wealthy foreigners that he expects to start snapping up Dorset's finest homes.
"Lots of rich Russians and Arabs bought in London a while ago. They're established there now, and are looking further afield for British real estate," he said. "I think they will look to Sandbanks, not least because a waterfront property here is a definite status symbol."