Big numbers for west end residential

Developers’ ambitions to build ultra luxury apartments in the West End are increasing as the flow of foreign buyers continues to grow, the latest being Greek and Spanish investors seeking safe havens for their cash.

Among the luxury projects is a proposed plan by Brockton Capital for a £400 million residential scheme on a corner site at 56 Curzon Street where it has been piecing together the land since 2007.

At the moment, the block has 35 flats and the new scheme would have a restaurant, garden, spa and underground parking. Initial estimates are that selling prices would be £48,420 a sq.metre (£4,500 a sq.ft.).

Another major residential scheme is for the Clarges Estate at 82-84 Piccadilly, a former office of the MI6 spy agency, which is expected to go to Chelsfield Partners for £170 million. The 1 acre scheme could mean similar prices to those
expected for Brockton’s project and comes at a time when there is a shortage of major sites for offices in the West End.

John Caudwell, who made a fortune marketing mobile telephones, has joined in the quest for luxury residential schemes in the heart of Mayfair. He has purchased Audley Square House for £143 million and plans a large residential scheme.

Caudwell said: “The intention is not just to re establish Audley Square as one of the most desirable residential areas in London, but as one of the most desirable in the world, with super prime properties appealing to the most discerning buyers and I believe traditional Mayfair architecture is the key to success.”

Weathering the storm

There is a depth to the West End office market that helps it to weather the market gyrations between the highs and lows of sentiment. For example, in the second quarter when the shortage of Grade A space grew, bringing a 30% decline in take up, second hand space took up the slack and grew strongly so that the total for the quarter was an average 102,190 sq.metres (1.1 million sq.ft.). Knight Frank reports that the vacancy rate is the lowest for three years at 5.6%.

That has pushed speculative development up by 10% in the second quarter. Richard Scott of Mellersh & Harding commented: “The market has been quiet in August but there is a lot of money chasing safe havens. The hedge funds and commodity traders are still seeking space.

Apart from the shortage of Grade A for letting, there is also the lack of top space for investment.” Among the Mellersh & Harding deals, there is the sale of a mixed use property at 73-77 Kings Road, SW3 to a private client of Concorde Capital for £13.5 million, a yield of 5.25%. While there is always a shortage of large development sites in the West End one that bucks this is the former Middlesex Hospital in Fitzrovia.

The consortium of Exemplar Properties, Aviva Investors and Kauphing has a new design for it with a mixed use scheme of 53,418 sq.metres (575,000 sq.ft.) that uses a mix of facades to merge with the surrounding area, rather than a modernist approach as proposed by MAKE. Part of the office content is designed to appeal to the media as befits the area while the residential space has been changed to 250 small private flats from 181 larger ones.