One of the first big investment opportunities of 2015 has come to market with a £250m slice of London’s trendy Notting Hill being put up for sale.
Pears Group and LaSalle Investment Management have appointed agents to sell the Notting Hill Gate Estate, a four building mixed-use portfolio at the heart of the famous London district.
The estate, comprising shops, offices and flats, has major redevelopment potential with the capacity for around 100,000 sq ft of prime residential space to be added, plus multiple asset management opportunities.
The joint venture partners acquired the estate in June 2010 for around £130m, reflecting a 5% yield.
They have since sold off individual buildings including Newcombe House and Hobson House, the former of which was bought by Development Securities and Brockton Capital for £50m in 2011.
The remaining 165,000 sq ft estate is comprised of 92-144 Notting Hill Gate, West Block, David Game House and Astley House, all W11.
West Block, on the north side of Notting Hill Gate, offers the best short-term development opportunity.
It is currently comprised of ground floor shops with residential on Assured Standard Tenancies above, and has the potential for a substantial residential-led redevelopment.
In total the estate comprises around 120,000 sq ft of shops and 42,000 sq ft of offices.
The office space, which is predominantly on the south side of Notting Hill Gate, is currently let off low passing rents of around £25 per sq ft, offering significant potential for growth. Rents elsewhere in the Royal Borough of Kensington & Chelsea currently top £60 per sq ft.
The value of the retail space also has growth potential, with recent lettings pushing zone-A rents in the northern block up from £160 per sq ft to £230 per sq ft.
The opportunity is expected to appeal to long-term investors with strong asset management and development expertise interested in shaping the wider regeneration of Notting Hill Gate.
Pears Property managing director, Jonathan Rose, declined to comment on the sale but said the group was “always reviewing its options”.
Savills is advising on the sale.
