Cordea Savills, the international property investment manager, has acquired the first two assets on behalf of its Prime London Residential Development Fund.
Cordea Savills, the international property investment manager, has acquired the first two assets on behalf of its Prime London Residential Development Fund.
Located adjacent to each other in Chelsea, the purchase price for the assets is in the region of £40 mln (EUR 50 mln). Cordea Savills partnered with a private family office as co-investor and specialist revival developer, Tenhurst, on both transactions.
The sites, a former chapel and a former college building are situated between the Kings Road and the Fulham Road. Once developed they are expected to provide 65,000 sq ft (6,040 m2) of residential space, together with landscaped grounds, secure underground parking and full services.
Cordea Savills is targeting a total equity raise of £100 mln with a final close in Q2 2013.
The fund has a target return of 18-20% per annum over a four-year life. It will provide finance through discounted forward commitments, development equity funding in joint ventures with preferred development partners and the provision of mezzanine finance. It will target opportunities in prime London locations where the company's research indicates maximum demand from both domestic and international buyers.
'Ever since the banks made it clear that they were not prepared to lend on property development, at least on workable terms, there has been a dearth of development. This has led to a shortage of newly-built units in prime London locations despite ever increasing demand,' said Brian D’Arcy Clark, head of Residential Investment at Cordea Savills.
The fund is a sterling-denominated closed-ended English Limited Partnership with a Jersey feeder. It has a term of four years with the option to extend by a further two years, and will be able to use gearing where appropriate.
