In a dramatic return to the prime London residential market, a Lodha-affiliated company has exchanged contracts with Delancey to buy its super high-end Kensington Odeon development.
An SPV backed by Abhishek Lodha, managing director and chief executive of Lodha Group, is looking to buy the site which could have an end value of close to £300m.
India’s largest developer – which made headlines in 2013 when it bought the Canadian Embassy on Grosvenor Square, W1 for £306m – has not bought anything since 2014.
But the developer is taking advantage of Delancey’s prime London exit and a possible bottoming out of the high end residential market to re-enter the fray.
The Kensington Odeon scheme has planning for 43 prime homes in a development retaining the listed art deco façade of the exiting cinema.
Minerva, the owner of the site that Delancey bought in 2011 with Ares, had been seeking offers of around £90m. It is understood that Lodha fought off competition from Galliard to buy the project.
A Lodha spokesman said the company itself is not making the purchase.
Planning for the site at 257-265 Kensington High Street, W8, is for 35 flats, eight town houses and 20 on site social units. The scheme also includes a cinema and ground-floor retail.
It was first put up for sale in October 2015 with Savills and Knight Frank acting as agents, but as the prime London market cooled so did hopes of a quick sale.
Lodha’s return marks a potential turning point in the London luxury residential market, which has seen very few large development sites changing hands for the last two years.
Anecdotally, land values have since gone down, while sales and sale prices have stabilised.
According to latest Savills prime research, overall prime values fell 3.8% in the year to June, and remain 17.6% from their peak.
However there is huge divergence in performance between the top and bottom assets. The top 10% of saw values increase by 0.2% and have returned to 2014 peak values. Alternatively, the worst 10% saw a further 7.7% decline in the year to June and are down by 32% overall.
Alongside the 44 luxury flats at 1 Grosvenor Square, Lodha is building 202 flats at Lincolns Square, which it bought for £90m in 2014.
At the time, Abishek Lodha told the Times of India that he planned to invest $5bn (£4bn) in London. Abhinandan Lodha, the deputy managing director, said the firm intended to invest considerably in the Mumbai and London markets.
But after this the developer made no further acquisitions and revised the planning on both its schemes: to remove the listed façade at Grosvenor Square; and to reduce unit sizes at Lincoln’s Square. It is currently building out both schemes with sales reportedly going well.
Read more about Lodha’s London plans
In a further statement to EG Lodha said: “Following the publication of an article in the Estates Gazette about the sale of the Kensington Odeon, which identified Lodha or “an SPV backed by Abhishek Lodha” as having acquired the site, the purpose of this letter is to clarify that neither the Lodha Group, not an SPV owned by Abhishek Lodha, has acquired the Kensington Odeon.”
“Lodha UK has been approached to play a development management role on the project, but this has not been finalized.”
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