Middle Eastern buyers are back with a bang, paying ‘top dollar’ for central London sites
Christian Candy’s CPC Group this week sold two former Kensington hotel blocks to Middle Eastern investors for £320m.
In a spectacular vote of confidence in the central London residential market, clients of GVA Saxon Law and its sister company, Lancer, on Tuesday completed a deal to buy the former Kensington Palace and Kensington Park hotels.
The sale is also a stunning piece of business by vendor Cambulo Property Development Limited, which originally bought the sites at De Vere Gardens, London W8, for £69m in 2006.
Speaking to Property Week from Candy & Candy’s Beverly Hills office, co-founder Nick Candy said: ‘For top-quality product people will still pay top dollar. London is the capital city of the world and deals like this prove it.
‘Cambulo were approached on this with an offer they could not refuse.’
Christian Candy added: ‘Every single week CPC Group gets offers for our other projects, One Hyde Park and Noho Square. But we are developers first and foremost – we say no because we want to build.’
The purchase marks a return to central London investment for the clients of Lancer and GVA Saxon Law. Earlier in the decade they spent hundreds of millions on behalf of the Abu Dhabi royal family on large swathes of property around Berkeley Square, London W1.
In 2005 alone Lancer clients spent close to £1bn, including making a knockout bid of £445m for a block at 33 Cavendish Square.
In Kensington, the Middle Eastern purchasers are likely to spend heavily on development. Candy & Candy has already worked hard as development manager to enhance the value of the site. It achieved this by:
- buying the freehold at considerable expense and marrying it with the leasehold interests in the Kensington Palace hotel to enhance the site’s value
- gaining consent for a David Chipperfield-designed conversion of the hotels into 97 apartments, after being deferred twice by the Royal Borough of Kensington and Chelsea
- winning a High Court battle, culminating in victory in the Court of Appeal, on 24 January 2008 after a vexatious litigant tried to launch a judicial review against the granting of planning permission
- buying a site for off-site affordable housing at Kingsgate House that added to costs.
While much of the residential market is weakening, cash-rich buyers still appear to have money to burn.
Only last week CPC Group and its partners sold a flat at its One Hyde Park scheme for £50m and another for £15m with still more in the pipeline.
And on 31 January CPC Group and Qatari Diar bought Chelsea Barracks for £959m and took a loan out for £1.2bn, which was fully financed in the tough current market.