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Kate Moss the Interior Designer
This week’s property news features Kate Moss as a property designer, big deals in the residential development world and disappointing auction results. Read more in our latest Property Eye –
Having made millions as a supermodel, Kate Moss is taking on a new role as an interior designer – unveiling a stunning treatment for a barn in her beloved Cotswolds. Meanwhile the New York love nest that she once shared with actor Johnny Depp is for sale at £9.71 million. The former couple rented the entire building when they dated but it is now split into a duplex penthouse, one-bedroom flat, a garden duplex and a two-bedroom carriage house.
Gangsters’ Film Home
A two-bedroom house near Waterloo which is the backdrop to scenes in the new Kray Twins movie Legend, starring Tom Hardy, is now on the market for £2.375 million.
As the final series of Downtown Abbey gets under way Byfleet Manor in Surrey which in the show is known as Dower House, home to Lady Violet Crawley, the dowager played by Dame Maggie Smith, has been sold for £6m.
The 17th-century house was put on the market in May for £3.95 million, alongside three more residential properties and a development plot in the grounds and the entire estate has now been snapped up by a British buyer after attracting interest from around the globe. The home was sold by local business woman Julie Hatton, who bought it some 10 years ago for about £1 million.
Rent Emily’s LA bolt hole
For £395 a night the former home of British actress Emily Blunt and her actor/director husband John Krasinski is available to rent. The Hollywood Hills property where the A-list couple lived for more than two years, is now listed on airbnb and features six bedrooms, three bathrooms and an open plan living and kitchen area.
Another Big Deal in the Student Market
Following on from our report last time about Empiric’s investments in the hot sector that the student market is becoming comes news this week that Student accommodation provider Unite Group has acquired two development sites in central Bristol for flats for 900 students.
The sites are located to house students from both of the universities and are expected to be delivered in 2019 with a total development cost, including the cost of the land, of around £85m.
Richard Simpson, managing director of property for Unite Students, said: “We are delighted to have acquired two high quality sites in Bristol. We look forward to developing these sites and adding more high quality student accommodation to our existing estate in a strategically important city.”
Manchester Scheme seeks Backer
The council-backed Mayfield Partnership has launched its search for a development partner for its Mayfield Quarter mixed-use scheme in Manchester. The plans are for 1,300 homes, over 800,000 sq ft of office space, a 350-bedroom hotel, retail and leisure facilities and a new six-acre city park along the River Medlock.
The chosen partner will lead the development of the currently derelict site, which the Mayfield Partnership hopes will extend the city centre westwards and regenerate the wider Piccadilly area.
The partnership, formed by London and Continental Railways (LCR), Manchester City Council and Transport for Greater Manchester, launched the procurement process this week with the issue of the pre-qualification questionnaire, which will assess the commercial, technical and financial competencies of the companies that come forward to bid for the contract.
Sir Richard Leese, leader of Manchester City Council, said: “Mayfield is a prime example of what can be achieved through partnership working and with a clear vision. And demonstrates the depth and breadth of excellent investment opportunities available in Manchester.
“I’m pleased we’re launching the search for a development partner who will help us to deliver a scheme which over time will make a significant contribution towards the city’s growth, by leveraging Mayfield’s proximity to Manchester Piccadilly Station and the planned new HS2 terminal. We look forward to making the vision for Mayfield into a reality.”
Crawley Borough Council has given the go ahead to real estate investment and development company Westrock for the conversion of a 130,000 sq ft Crawley office building into 185 apartments, as well as a rooftop terrace, gym and communal lounge. The flats are being built on a build-to-rent basis, as part of Westrock’s strategy to construct a 3,000-unit portfolio worth more than £600m.
The Crawley development is part of the first phase of Westrock’s portfolio, which includes three other sites in the South East and one in the South West, all of which are currently under construction and scheduled for completion next year. Two future phases will see similar blocks developed across other parts of the UK.
Meanwhile over in Bermondey a major mixed use development has been announced by developers First Base and private investment firm Starwood Capital to replace the 185,000 sq ft office block in Tower Bridge Road. The development will include a major residential component as well as commercial space and is expected t0 have a gross development value in excess of £100m.
First Base has already partnered with Starwood on Ashchurch Villas, a high-end residential development in Ravenscourt Park comprising 15 family-sized, 4-bedroom houses and seven 3-bedroom mews houses.
Barry Jessup, director at First Base, said: “This is a hugely exciting project for us, and an opportunity to revitalise the existing site to create a sustainable mixed-use scheme that responds to the diversity and heritage of the area. The current site obstructs pedestrian routes from Bermondsey to the river, which we would like to re-establish, as well as create new public areas that serve the local community and link with the adjacent churchyard.”
Nick Chadwick, vice president of Starwood Capital Group, added: “We are thrilled to be building upon the success of our Ashchurch Villas collaboration with First Base, and look forward to the continued growth of the partnership between the two firms.”
Residential buying spree continues
Residential Land has exchanged contracts for the purchase of 122 luxury flats from Swedish investor Akelius for around £95m.in a red-brick Victorian mansion block refurbishment in Hammersmith, west London. This reflects a price of around £1,000/sq ft across the scheme near Ravenscourt Park.
The private rented sector specialist has been on an acquisition spree since securing further backing from Canadian pension fund giant Ivanhoé Cambridge for a fifth Residential Land fund in February. The new £650m fund is focused on a broader area of prime central London, and its upper price point for investment has increased from £1,500/sq ft to £1,650/sq ft.
In June, it snapped up Chase New Homes’ residential scheme at Palace Wharf in Fulham at £1,250/sq ft – in a deal worth approximately £37m – as well as a luxury 60-flat scheme at 4b Merchant Square, Paddington, for £60m from Native Land and Malaysian investor Amcorp.
Akelius has renovated the majority of the properties at Hamlet Gardens since purchasing them from an arm of the Royal Bank of Scotland for more than £40m in 2013.
Three final phases are still being renovated but these have been forward-purchased by Residential Land and are included in the purchase price.
Similar flats in the area have recently sold for as much as £800,000.
“We believe that there will be growth in the area around Ravenscourt Park and are pleased to have invested another £100m in the prime central London market,” said the Company’s owner Bruce Ritchie.
Root and Branch Review for Scotland’s Planning System
Scotland’s first minister Nicola Sturgeon has announced that there is to be a ‘root and branch’ review of the Scottish planning system in the first significant shake-up of land use regulation north of the border since the Planning Act in 2006.
The review will focus on development planning; housing delivery; planning for infrastructure; improving development management; leadership, resourcing and skills; and community engagement. In her announcement, Sturgeon said the review was designed to help unlock land and sites for housing. It would also focus on streamlining, simplifying and improving current systems, while removing “unnecessary blockages in the decision-making process”.
About 15,000 new homes were built in Scotland last year, two-thirds of the 23,000 needed a year, according to the recently published report of the broad-based housing and wellbeing commission but Craig McLaren, director of the Royal Town Planning Institute in Scotland, worries that the review will fuel perceptions that “the planning system in Scotland is broken, whereas that’s not the case The Scottish planning system is in better health than its English counterpart and 83% of Scottish local authorities have an up-to-date development plan – a far higher proportion than south of the border”.
Auctioneer’s Allsop blamed changes to stamp duty land tax rules for subdued sales at its September residential auction after several larger lots went unsold. The auction raised £49.4m and achieved a sale rate of 75%, with 182 of the 244 lots sold. By comparison, last September, 79% of the 288 lots sold, raising £54.5m, and this July’s auction achieved an even stronger success rate, with 86% of the 245 lots selling for a total of £56m.
Several large lots failed to hit their guide prices. Although the largest lot comprising 30 flats in Palmers Green, London, was sold for very nearly the guide price of £5.5m.
“There’s no doubt recent changes to the stamp duty land tax rules have had a cooling effect on the £1m+ market, with central and Greater London taking the bigger hits,” said partner and auctioneer Gary Murphy. “Despite this, buyers were still chasing good locations where pricing showed value.”
A vacant freehold residential building in Ladbroke Grove sold at the guide price of £2.4m, and Murphy said regulated tenancy investments sold well, with a leasehold flat in Warwick Avenue, Maida Vale, achieving a price of £1m against a guide of £800,000.
Murphy added that those who found inner London “a little too hot” continued to look for opportunities in the Home Counties. A church converted into a two-bedroom house in Oxted, Surrey, sold for £480,000 against a guide of £420,000.
The company’s record residential figure was reached in May, when £90m was raised from 285 lots, making it the UK’s biggest-ever single-day residential auction.
Big Deal Announced
In a landmark deal announced this week, Urban Exposure and US hedge fund EJF Capital have formed a joint venture which will create a £2bn fund for lending on residential developments in London and the South East. The news comes just over a year after Urban Exposure was forced to pull a £500m initial public offering (IPO) because of stock market volatility.
EJF, which manages more than $6.6bn (£4.3bn) of assets, was a £75m cornerstone investor behind the failed float and kept up a dialogue with Urban Exposure’s management, which has now culminated in the formation of a new private company that will trade under the Urban Exposure brand.
Urban Exposure chief executive Randeesh Sandhu said that the deal would give the lender the capital to “keep doing what we’re doing” and guarantee the speed and certainty of deal execution.
Despite growing concern about the health of some parts of the central London housing market, he was confident Urban Exposure would be able to ramp up its lending without taking on more risk.
“We are not chasing return,” he said. “We are trying to target areas where there is a supply and demand imbalance and we are cautious about some parts of the market, such as large single dwellings in areas like Knightsbridge.”
The new company was formed to provide loans across the UK, but the initial focus will be on London and the South East, where the mismatch between supply and demand is most acute.
Urban Exposure was one of the first non-bank lenders to emerge after the financial crisis to exploit the financing gap created by the retreat of the banks and is able to offer a suite of financing options that banks struggle to provide because of the tougher regulatory environment. It will continue to partner with other lenders and work a range of deals of all sizes down to a minimum of £5m as it looks to diversify and more deals are expected over the next few months.
Four development sites sold
Residential develop United House has sold four development sites to Telford Homes for £22.97m after dropping plans to raise £100m of new equity. Last September, the Company sold its contracting arm and proposed a new equity launch with the goal of raising enough funds to build its pipeline, which at the time consisted of 2,000 homes across 12 London schemes with an end value of nearly £1bn.
However, this week the company revealed that instead of raising new equity it had sold the four sites, in north and east London, with a combined development value of about £500m, in a move that leaves it with smaller-scale development projects worth £150m in Soho, West Smithfield and Feltham in London, as well as Swanley in Kent but also free of debt.
Rather than pursuing large-scale, mixed-use regeneration schemes, the firm was returning to its roots by focusing on developments of 15-50 units, said chief executive Rick de Blaby who added “United House is liberated to develop the balance of our portfolio and return to our core expertise of delivering bespoke, niche London residential developments,”.
For Telford Homes, the deal transforms its existing £1bn pipeline. The development sites are at various stages of planning and are expected to deliver housing in the relatively affordable range of £500 to £800 per sq ft, where demand remains strong.
This Week’s Statistics
(Thanks to PropertyWeek.com)
974,000 is the number of homes the National Housing Federation estimated were needed between 2011 and 2014.
£2bn is the amount new company Urban Exposure Finance, a joint venture between Urban Exposure and EJF Capital, will invest in the residential development market in London.
50% will be the rise in London’s student population in the next 10 years, according to JLL.
457,490 was the number of homes built by 326 UK councils between 2011 and 2014.
£5.23m is the revenue posted by sales agent Hunters in its first results as a public company.
£3.8bn was invested in the student housing sector in the first half of 2015, according to JLL.
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