Legal & General is to sell the Néstlé Tower in Croydon, south London, to neighbouring owner Delancey’s and Ares Property Partners’ Minerva in an off-market deal that will unlock two development projects.
The joint venture will pay around £10m for the 24-storey block, also known as St George’s House. L&G bought the 1960s building in 2012 before securing a 311-flat office-to-resi planning consent in 2013. It is considered a likely target for a private rented sector development with an end value of up to £75m.
L&G, which owns the 200,000 sq ft block through its UK Property Income Fund, had not begun work on the site owing to a complex pattern of intertwining title ownerships relating to Minerva’s adjacent holdings. Taking the site into Minerva’s ownership means it can be developed immediately.
The sale comes prior to the end of the life of the Legal & General fund. The scheme would have completed at an awkward time – after the fund’s planned maturity.
Minerva’s other holdings, which complete a block fronting Park Lane, are retail parade St George’s Walk and the 25,403 sq ft Segas House, the vacant Grade II listed former headquarters of Croydon Gas Company.
These were once part of the 1.1m sq ft regeneration project known as Park Place but it is not expected that any redevelopment will be of any similar scale.
Croydon council withdrew its support for Park Place in 2009. It had struggled to find funding in the recession and was mothballed in the face of Hammerson’s Centrale extension and Westfield’s and Hammerson’s £1.5bn Whitgift scheme.
Unlike Minerva’s 530,000 sq ft former Allders department store, the Park Lane holdings are not in the CPO area for Hammerson’s and Westfield’s Whitgift project.
