UK: A serviced apartment building in Notting Hill has sold for £665,000 per key – a claimed record for the capital.
The building, at 74 – 76 Princes Square, W2, sold for around £25 million, reflecting a price per unit of approximately £665,000, and £1,600 per square foot, producing a yield of 2.8 per cent.
The property was originally built in 1999 and sold in 2006, using a model that sold apartments to individual investors, then let and managed the units for them.
Specialist hotel agents Gerard Nolan & Partners negotiated an off market deal for the investors which more than doubled their original investment. This together with the last 12 years income delivered most of the investors more than 40 per cent per annum plus return on their original equity. The company claims the transaction represents the highest price per key in London for a serviced apartment building and the highest price per key for the W2 area of London.
The buyer, an undisclosed UK fund, was attracted to the building for its sui generis planning use and that the property can be easily reconfigured.
Gerard Nolan said: “I set up this property model in the early 2000s and we sold over 1,000 units. The model enables individual investors to share in the success of larger hotels and serviced apartments. Unfortunately, after the financial crisis in 2008, banks became reluctant to lend against individual hotel rooms. However, in Notting Hill we had no defaults and this sale proves that working together the investors have had a fantastic return selling to a single buyer. We are very keen to work on other projects as we are confident we can deliver double digit returns for our investors.”
BridgeStreet will continue to operate and manage the building after completion.
