The West End sails on regardless. This week sees almost 40 investors battling it out over just four assets. Some 36 bids have been made for the properties – and all at above asking prices.
It’s a familiar story of limited supply, London’s near-unique safe-haven status and of opportunity, not least in residential conversion.
Natwest had been seeking £17m for the 0.9-acre development opportunity at 1913 Shaftesbury Avenue. After 12 bids, it’s likely to realise closer to £25m. The £12m, 6,000 sq ft 107 New Bond Street is likely to go to Aidan Brooks. There, the number of interested parties reached double figures.
Russian money is set to secure 6 Duke Street for more than the £38.1m being sought by Nick Leslau’s Prestbury. And Amazon Properties looks to be the favourite to buy BBC Worldwide’s home at 33 Foley Street for £22m. Expect residential conversion to begin in 2015.
Can anything undermine the West End’s strength? It’s hard to see what might.
According to EGi’s London office market analysis, published in April, there were 13 transactions in the first three months of 2012, a fall on the same periods of 2010 and 2011. Supply is tight, and is only getting tighter.
The dearth of debt finance is not a factor, either. The likely buyers of these assets don’t need to borrow. That makes them exactly the sort of people banks want to lend to.
Meanwhile, London’s safe-haven status continues to be beacon for foreign investment and will be enhanced by a successful Olympics.
Those factors only strengthen the case for West End residential. Were Camden council to back Mike Hussey’s request to convert Centre Point to resi, even more investor appetites would be whetted.
• David Atkins writes a good, front-foot column for us this week (p55). Just days after agreeing to sell his office portfolio to Brookfield for £518m, the Hammerson chief executive describes the deal as marking “a tipping point” for the business. The above-book-value deal is exactly that; retail assets now represent 97% of the Hammerson portfolio.
Railing against retail doom-mongers, Atkins is certain in his ambition: “Our focus is clear – to create and manage successful retail properties in winning locations. As a specialist, however, being good at retail will not be enough. We need to be the best.”
• Happy birthday Jones Lang LaSalle (incorporating King Sturge). It’s a year since the two firms sought to become Better Together and if appearances at last week’s summer client party were anything to go by, it’s been a pretty successful union.
Certainly those employees we talked to this week see an upside (p56).
There have been difficulties, for sure. Rationalisation on the staffing front was inevitable; the troubled economy has accelerated it. And there are bound to be further bumps in the road. The broader picture is perhaps more interesting.
Could two similarly sized firms come together in the next 18 months? It’s possible, but smaller tie-ups are more likely.
And if another mega-deal were to come off, could it be managed as seamlessly? To the credit of messrs Batten and Gould, the bar has been set pretty high.
• Fancy winning an iPad3? Estates Gazette, and Grosvenor have teamed up to bring you a new Property Sentiment Survey. We want to know your outlook on your sector and the economy at large. As well as revealing the true state of the property market in 2012, more than anything we want to identify where growth is going to come from. The brief survey will only take a few minutes to complete and each respondent will be entered into a prize draw to win an iPad3. To fill in the survey, go to www.estatesgazette.com/sentiment-survey. It closes on Monday, so act fast.
