Berkeley Group bosses recently announced they will get a bonus of £280 million if they deliver a £1.7bn cash return to shareholders over the next nine years. More on the EGi story here. Those who like me at first thought that was a rather astronomical figure, for the developers who I might add, build around 20% of all new build residential flats across the capital, should take this example into account.
Roman House, Wood Street. Just off London Wall near Moorgate. This was the site last Thursday, with refurbishment works now under way.
The price paid for the site is subject to differing accounts. The FT reported Berkeley paid close to £10m in 2010, however Land Reg states the residential developer paid just £4.5m (subject to certain leases). Whatever they paid it was low. On those values the price paid per sq ft equals between £53 and £119.
Why so low? Well Berkeley bought the site as a speculative bet on the City of London planners allowing them to build a residential scheme, where previously they've been reluctant to allow too much to cause disruption to a thriving commercial centre. They also needed consent of the City Paraochial Foundation, who would have to agree to change the terms of the lease acquired by Berkeley to allow residential development. The building also had a problem with asbestos.
Gaining the planning permission for change of use to residential was pretty straight forward however. Submitted in July 2011 and granted in December 2011, Berkeley received planning consent for 90 entirely private flats.
For comparison of expected apartment prices at pound per sq foot values lets look at 'The Heron', which is nearing completion and situated around 200 yards away to the north. The average price for an apartment across all tenures is £846,301, the maximum price paid is £4,300,000. That in pound per sq ft values equate to an average of £1,303 and a maximum of £1,921. Studios in the Roman House development start at £499,995 and will go up a lot more.
90 private units, no social. Under £10million paid for the site and less than £4million paid towards affordable housing via S106. To say Berkeley are on to a winner at this development would be an understatement...
View the EGi record for Roman House here.
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