£3 billion Qatari Diar redevelopment of Chelsea Barracks put on hold as UK economy stalls

Prince Charles is unlikely to be best pleased. A £3 billion redevelopment in one of London’s swankiest postcodes which the heir to the throne lobbied ferociously to be built in his preferred architectural style has been placed on hold by its Qatari owners.

The Gulf state, whose subjects currently enjoy the world’s highest per capita income, has put the Chelsea Barracks project under review, citing “the prevailing economic environment” as a reason for re-considering when to press ahead with one of the capital’s more ill-starred building schemes.

It was reported tonight that Qatari Diar, the emirate’s sovereign wealth fund whose British assets range from Harrods and a chunk of the Olympic Village to an 80 per cent share of the Shard, may even consider selling the £1bn “super-prime” site that was once considered a jewel in the crown of its burgeoning property portfolio. The organisation had fought a long – and at times painfully public – battle to secure planning permission for the scheme of nearly 600 luxury pads and affordable homes, nicknamed the Gucci Ghetto, ever since it first disclosed plans for the 13-acre site by the architect Lord Rogers in 2009.

His glass and steel blueprint drew a dyspeptic response from Prince Charles, who wrote directly to the Qatari prime minister, Sheikh Hamad bin Jassim al Thani, complaining about the “Brutalist” proposals which he said amounted to a “gigantic experiment with the very soul of this city”.

The letter, which was made public in subsequent unrelated legal proceedings, was followed by a decision by Qatari Diar to jettison Lord Rogers’ design and draw up a more traditional – or as the Prince put it, “timeless”– scheme which was eventually accepted by planners in late 2011.

But despite recent moves to refine the blueprints and prepare the dowdy former Ministry of Defence site to be re-born as a vision of sandstone mansions and parked Maseratis, the only sign of rapid growth at the barracks of late has been invasive shrubs breaking through the abandoned concrete.

A spokeswoman for Qatari Diar said: “The developer is currently refining its strategy for the development of this unique site to progress and realise its vision for this important part of London. It is taking advantage of the opportunity to review and respond to the context of the prevailing economic environment in preparing for the next stage of development.”

The fund declined to comment on claims that, as Britain teeters on the brink of a triple-dip recession, its ardour for putting its mark on an SW1 postcode had cooled to the extent that it might consider offers for the site.

The uber-wealthy hinterland of Chelsea has benefited from the same recession-busting demand from the international glitterati that has seen a 40 per cent rise in prices for homes costing £10m or more since 2009.

For the moment at least, Qatari Diar, which will not have greatly enjoyed finding itself on the wrong side of complaints from an alliance including the House of Windsor and Chelsea Pensioners, may be choosing to concentrate on other ongoing projects.