British Land has confirmed it has entered into a development agreement with The Portman Estate to purchase and develop Marble Arch House, W1, as revealed by EG (2 August).
On receipt of vacant possession, the REIT will pay £18m for the development site, which is located on the corner of Seymour Street and Edgware Road.
The existing site consists of two mixed-use five-storey buildings, 32-50 Edgware Road and 62-64 Seymour Street.
The Bennett’s Associates Architects-development, which has detailed planning consent, will comprise office, residential and retail space and has been designed to achieve a BREEAM excellent environmental rating.
It will comprise 60,000 sq ft of office accommodation together with 15,000 sq ft of shops.
Adjacent to the new office building will be a development of 10 luxury flats, with a 5,000 sq ft restaurant unit at ground level built behind the retained period Victorian facade of 62-64 Seymour Street.
The total cost of development (excluding land and interest) is expected to be around £40m. Demolition and ground works are expected to start in mid-2011 with practical completion scheduled for mid-2013.
On completion of the development, British Land will be granted a new 125-year leasehold interest on the commercial element of the development and a separate long leasehold on the residential units.
Tim Roberts, head of offices at British Land, said: “We are pleased to have secured yet another great development opportunity on The Portman Estate. Marble Arch House will offer high quality accommodation at a time when supply will be limited in a West End location which is being regenerated.”
Gareth Clutton, chief executive of The Portman Estate, said: “There was a great deal of interest in this development opportunity but British Land’s proposal eclipsed the others and we are delighted to work with them again on this their third major transaction on The Portman Estate.”
CBRE acted for The Portman Estate; Cushman & Wakefield represented British Land.
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