How a Saudi prince lost his 250 million palace in London

There is no shortage of exclusive addresses in London. With "The Holme" in Regent's Park, however, a special jewel is now coming onto the market. Finest 1818 Regency architecture, 2700 square feet of living space, sumptuously appointed, three dozen bedrooms, library, eight garages, all set in 16,000 square feet of manicured gardens overlooking Boating Lake in posh parkland just north of Marylebone. The exclusive palace is still owned by Prince Khaled bin Sultan al-Saud, a member of the Saudi royal family and the country's former defense minister.

Property experts from Beauchamp Estates and Knight Frank, who are in charge of the sale, have spent £250 million (280 million euros) as a guide – a new record for London. Since 2020, he has had a posh town house in Rutland Gate south of Hyde Park at £210 million, but it has no garden to offer.

The industry agrees: A trophy like The Holme is only very rarely on the market, so a record price is quite possible. The footprint, the location, the good condition, the view of the lake, all can't be beat. The building with its classical column facade and semi-circular porch is compared to Buckingham Palace and the White House in Washington.

The buildings from the Regency period, the first decades of the 19th century, are considered to be particularly in demand because of their symmetrical architecture and the spacious layout, and only comparatively few have survived. The possibilities of living in one of London's parks can almost be counted on one hand anyway.

And yet there is a catch. The "Financial Times" quotes an anonymous expert for this segment, which is important in the London market, as saying that the top rule for real estate transactions at the top end of the exclusivity scale is being violated. "There's practically a 'For Sale' sign in front of the door - that's not a good starting point at all."

It is usual that as little as possible is known in advance about transactions of this magnitude: not the owner, not a possible intention to sell, not the hoped-for price.

But behind the potential deal is apparently a complex web of loans and disgruntled lenders. The building is on the market at all because the previous owner was no longer able to service a loan that was secured with the property, among other things. According to information from the "Financial Times", a company managed by the London hedge fund Attestor then appointed the receiver.

A second lender, Yuntian 10 Leasing Company, a subsidiary of China Minsheng Bank, is also suing Prince Khaled after failing to pay lease payments on a private jet, a deal struck through a Bermuda company.

Quendon Limited in Guernsey has been the official owner of the building since 1991. The property belongs to the Crown Estate, the British crown, but can be used in the long term via a leasehold model.

However, Prince Khaled remains the economic beneficiary, the newspaper quotes the leasing company's lawyers from the trial documents as saying. Therefore, the building can be used to pay the lease payments that are due. The other side defends itself against these claims and against the linking of the property with the leasing transaction.

It is clear from the litigation documents that Quendon's property has been used more frequently in recent years as collateral for loans, and in some cases to service previous loans. Since 2017, when Prince Mohammed Bin Salman was appointed Crown Prince of the Kingdom of Saudi Arabia, the financial situation of parts of the royal family has become more complicated.

The prince, who has exercised de facto power in the state since his appointment, has positioned himself as a champion against corruption and has also cracked down on members of the royal family. Prince Khaled is not among those affected. However, according to media reports, he has parted with a number of valuable possessions in recent years.

Financially, the sale of the property in Regent's Park should provide some breathing space. But the transaction will not be easy. Traditionally, deals of this magnitude in London have often been transacted through companies domiciled in jurisdictions with low disclosure requirements, with the real owners remaining in the background.

But in recent years, more and more politicians have found this practice unsuitable. Illegally acquired money can be disguised so easily. Strict rules include a recently introduced register requiring foreign companies owning property in the UK to identify beneficial owners. Otherwise there is a risk of fines and a sale is not possible. Quendon's Companies House register names five of Prince Khaled's children.

Deals such as the city's most expensive real estate sale to date are unlikely to be possible. The 45-room Rutland Gate mansion was sold by a Curaçao-based vehicle to a British Virgin Islands company just before the pandemic hit. Many months later, British media revealed the actual owner as Hui Ka Yan, founder of ailing Chinese real estate giant Evergrande.

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