News

Bond Street sparkles with flurry of designer deals

News

Estates Gazette

01 February 2003

Acquisitive jeweller picks up building housing Cartier store at 4.4% yield
Adam Coffer

Prospects of rental growth and low borrowing costs have put another £70m worth of prime Bond Street property in play.

This week, two of the best retail pitches in the UK changed hands at yields of under 5%.

Millionaire jeweller Laurence Graff has bought the building that houses rival upmarket jeweller Cartier’s West End flagship at 175 New Bond Street, W1. Graff paid £16.15m for the 7,000 sq ft (650m²) building, a yield of just 4.4%. It is his sixth acquisition in the area.

Last year Graff paid £59m for the building that houses Ralph Lauren’s flagship UK store and head office at 1 New Bond Street.

The Cartier building was sold by a private European in-house client of Michael Elliott. The same client has also this week benefited from the insatiable appetite for Bond Street stock from private Irish investors.

One such Irish investor paid £24.1m, a 4.9% yield, for Prada’s flagship store at 17-18 Old Bond Street. The 18,000 sq ft (1,700m²) building also includes almost 10,000 sq ft of offices.

Home to the world’s most glamorous retailers, Bond Street has enjoyed more investment activity than any other central London area in the past two years, with almost 30 buildings changing hands.

Michael Elliott director Ola Pettersson said: “It is a safe investment for the Irish. Buying in Bond Street, even at low yields, is not such a problem for them because they are borrowing at sub-4% in euros.

“The alternative is Dublin’s Grafton Street, where yields are now less than 3%. They also face 9% stamp duty in Ireland.”

Michael Elliott is expected to bring the building that houses DAKS at 10 Old Bond Street to the market this month for £23m, as well as the Proibito building at 94 New Bond Street, for £8.5m.

Michael Elliott’s Mark Shipman said: “Demand in the street is phenomenally strong, with US, Japanese and UK retailers looking to come there. There is still a fair amount of rental growth to come and covenants are grade A, making it a very sound investment.”

Acquisitive jeweller picks up building housing Cartier store at 4.4% yield Adam Coffer Prospects of rental growth and low borrowing costs have put another £70m worth of prime Bond Street property in play. This week, two of the best retail pitches in the UK changed hands at yields of under 5%. Millionaire jeweller Laurence Graff has bought the building that houses rival upmarket jeweller Cartier’s West End flagship at 175 New Bond Street, W1. Graff paid £16.15m for the 7,000 sq ft (650m2) building, a yield of just 4.4%. It is his sixth acquisition in the area. Last year Graff paid £59m for the building that houses Ralph Lauren’s flagship UK store and head office at 1 New Bond Street. The Cartier building was sold by a private European in-house client of Michael Elliott. The same client has also this week benefited from the insatiable appetite for Bond Street stock from private Irish investors. One such Irish investor paid £24.1m, a 4.9% yield, for Prada’s flagship store at 17-18 Old Bond Street. The 18,000 sq ft (1,700m2) building also includes almost 10,000 sq ft of offices. Home to the world’s most glamorous retailers, Bond Street has enjoyed more investment activity than any other central London area in the past two years, with almost 30 buildings changing hands. Michael Elliott director Ola Pettersson said: “It is a safe investment for the Irish. Buying in Bond Street, even at low yields, is not such a problem for them because they are borrowing at sub-4% in euros. “The alternative is Dublin’s Grafton Street, where yields are now less than 3%. They also face 9% stamp duty in Ireland.” Michael Elliott is expected to bring the building that houses DAKS at 10 Old Bond Street to the market this month for £23m, as well as the Proibito building at 94 New Bond Street, for £8.5m. Michael Elliott’s Mark Shipman said: “Demand in the street is phenomenally strong, with US, Japanese and UK retailers looking to come there. There is still a fair amount of rental growth to come and covenants are grade A, making it a very sound investment.”