M&G Real Estate is under offer to buy a block of Marylebone flats in what is thought to be the first instance of an institution buying a house in multiple occupation.
The fund manager has agreed terms to buy five adjoining Grade II-listed Georgian town houses known as the Baker Street Apartments, NW1, for £25m, a net yield of more than 4%.
The blocks are arranged as 48 self-contained studios, two one-bedroom flats, and seven non-self-contained studios with access to separate bathrooms.
They are therefore classified as homes in multiple
occupation – a classification usually reserved for properties rented to at least three people who are not from the same family but share facilities such as bathrooms and kitchens.
The classification entails various restrictions preventing the breakup of the flats, which has typically deterred institutional investment into the sector.
But M&G is understood to have been attracted by the relatively high yields on offer in such a prime central London location.
Savills is advising the private vendor.
