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January 31, 2014
Prime London Development Opportunity for sale in Mayfair Asking £50m
Mayfair Development Opportunity To Make One Of The Districts Largest Single Residences
39 Charles Street is on the market and is one of the largest single dwelling freehold development opportunities to be offered on the open market. The property includes 39 Clarges Mews at the rear and in total the property extends to just under 15,000 square foot.
Planning permission has been granted to extend to 22,000sqft, with the bulk of the additional space being below ground level and also plans for a spacious library on the ground floor.
This marketed opportunity follows a flurry of large scale development purchases in Mayfair in 2013 including the Lodha groups acquisition of the Canadian High Commission on Grosvenor Square, Finchatton’s purchase of 20 Grosvenor Square and Native Land’s purchase and planning gain at 30 Old Burlington Street.
So how do the numbers stack up?
On the total current space at the asking price, the incoming buyer would be paying a price per square foot of over £3000psf. This price would seem to include a premium for the property’s pedigree which includes various nobles including Earls, a Marquis and also a Member of Parliament, market momentum, its size and the location. The location is ultra prime Mayfair off Berkley Square and with some of the area’s finest period terraced architecture, spearheaded by John Phillips in the 1750s.
It is estimated about £20million would be required to rehabilitate the extremely dilapidated property reflecting a spend of approximately £1000psf. Sales agents are proposing a resale of £100million or approximately £5000psf on completion providing an ROE for a cash funded developer of around 40%.
Only a handful of developers can boast achieving such lofty end user prices of £5000psf. Of course the Candy brothers have long surpassed this price level at One Hyde Park and also The Knightsbridge development has broken the £5000psf ceiling. Finchatton and Mayfair based Luxlo together with other developers active on some Belgravia squares have also come close to the price point.