Developer Alchemi Group has named Victoria, SW1, as a key target area for converting offices to residential properties, and has just snapped up 55 Victoria Street.
Alchemi has paid the BlackRock UK Property Fund £35m for the 57,090 sq ft building, reflecting a net initial yield of 6.5%.
The company is now drawing up proposals to convert the offices into flats when the Secretary of State for Transport’s lease expires at the property in June. The National Westminster Bank’s 5,336 sq ft lease for a term of 99 years until December 2085 at a passing rent of £108,000 pa is currently subject for review.
Charlie Baxter, managing director of Alchemi, said: “We see real growth in Victoria as government bodies start to exit the area. With Land Securities’ ambitious plans for regenerating Victoria, we expect a hike in residential values in SW1, and are looking to acquire more assets.”
Most recently, Alchemi bought 23 Buckingham Palace Road, for £3.5m to link to its property next door at 21 Buckingham Palace Road. It has now secured planning permission from Westminster city council to convert the offices into 14 flats.
Simon Heilpern, partner at DE&J Levy said: “This is a classic example of significant office buildings being converted into residential.”
DE&J Levy advised BlackRock; Alchemi was not represented.
