Slovakian developer J&T Real Estate has made its debut UK investment alongside Sons & Co, having exchanged contracts to buy Delancey’s £400m prime residential scheme at 185 Park Street, SE1.
The 163-flat project overlooking the Globe Theatre (pictured above) on the South Bank is the first JTRE has undertaken in the UK, and marks a significant change in scale for prime central London specialist Sons & Co.
JTRE has bought the site from Delancey’s DV4 fund, with Sons & Co acting as development manager in the pair’s first collaboration.
JTRE is a private Slovakian developer and investor established in 1996. It has completed more than 50 developments in Europe across five countries with a total value of more than €1bn, covering more than 8m sq ft of commercial space and 2.5m sq ft of residential space.
Following HB Reavis
It is the largest office development in Slovakia and the fourth largest residential developer, and follows in the footsteps of its compatriot HB Reavis, which entered the UK in 2013 and has since become one of the city’s most active developers.
The site at 185 Park Street, which was put up for sale for between £140m and £150m in 2015, has been bought for around £100m. However, originally the sale did not include a £30m social housing commitment, which Delancey would have paid. This has been renegotiated to a 57 flat affordable housing project on Southwark Park Road, SE1, which JTRE and Sons & Co will now take responsibility for.
The scheme comprises 163 flats in two towers of 15 and 19 storeys, and 87,081 sq ft of offices in a separate 10-storey tower, alongside 25,000 sq ft of cultural space and shops.
Demolition work to prepare the site is scheduled to start in the third quarter of the year, with construction to begin in the first quarter of 2019. A three-year development programme is anticipated, and completion is expected in 2022.
Complex project
Peter Korbačka, founder and chairman of the board of JTRE, said: “185 Park Street is a complex project in a sensitive area of cultural interest. It’s also a location with enormous potential and the development promises to be one of prime central London’s most anticipated projects.”
Planning was granted for the scheme by Southwark Council in 2015, at which point Delancey started the search for a backer or development partner to take it forward. It appointed JLL and Savills to market a stake in the site but the slowing residential market meant no taker was found at that time.
Since then, the prime market has shown signs of bottoming out and the deal is one of the first indications of returning interest in central London sites. Savills research says prime prices are 17.6% below peak 2014 values on average.
Opportunity
Alex Stocker, chief executive of Sons & Co, said: “185 Park Street is a rare and exceptional development opportunity and we are fortunate to develop the site at an optimum time within the property cycle.”
Sons & Co was set up by brothers Alex and Christian Stocker and Simon Roberts in 1990 and has since developed more than 500 apartments and 50 houses central London.
In 2018 it delivered three projects in central London with a combined end value of more than £125m: the £58m Pink Mews in Holborn, EC1; the £70m Castle Lane in Victoria, SW1; and a £60m scheme at Charles Street in Mayfair, W1. The three developments together comprise 70 homes.
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