DECONSTRUCTED: Royal replacement cost

Here’s a way to commit a huge chunk of equity to one asset: recreate Buckingham Palace, the Queen of England’s London residence.

Of course, the Palace has never been sold, so there is no historic valuation to follow. But a firm of cost consultants has concluded that to recreate the building – complete with green credentials – would cost £320 million (€356 million; $516 million), making it the most expensive home in the world.

Buckingham Palace

Consultant Faithful+Gould said the building would require 760 modern double-glazed sash windows, 19 state rooms, 78 bathrooms and 52 principal bedrooms, with 775 separate areas, including hallways and staircases in total, and take 3.5 years to complete (roughly the investment period of most funds).

nd in case you were wondering what returns the Queen might make should she ever decide to sell at £320 million, think in the region of a 10x multiple. Taking into account the purchase, build and extension costs incurred between 1761 and 1913, Buckingham Palace would have cost around £33 million in real terms.

Now that’s value-add.