We have finally managed to come to an agreement with another party in regards to a Joint Venture. We had two pieces of land next to each other, the other side had a long strip to the rear of one of ours.
Initially when we met the two brothers who owned the strip they tried to play hard ball with us and firstly claimed they had the right to sell it and then they demanded ludicrous sums for the land. Though they were the legal owners they had signed an option agreement with someone else, who was responsible for pushing the planning forward, and at that point he could exercise his option to purchase the property. He had put a charge on the title to register his interest.
We managed to unravel the situation and get to the option holder, and get the real story out; in the end the truth generally comes out. All it did was to make the legal owners look rather stupid. It is a waste of time playing games especially when you’re dealing with people in the property game.
After this hurdle had been crossed, the next conundrum was how do we split the cake, we clearly had the bigger and better site. There was talk of splitting whatever is gained by us by joining hands down the middle. I pushed for the gain to be split according to the value of the site we bring in, e.g. if our site is worth £100k and theirs £50k we split 2/3rds to us and 1/3rd to them. They were naturally resistant to this idea, but they then conceded. As the bottom line is we do not need them as much as they need us, not that this gives us a license to bully.
Based on this principle we will be applying for a pre app with the council for a 150 unit scheme which will include some units for social housing, we do have the option to separate this element completely from the main site.
Another deal we have just exchanged upon is in Linden Gardens, Notting Hill, W2. The property is a freehold house, consisting of 2,346 sq. ft. and was purchased for £1,065 per sq. ft. The local rate on the street is circa £1,650 per sq. ft. The property was a probate deal, meaning the previous owner died and his estate put the property on the market. The property belonged to a notable James Gowan, who passed away in June of this year. His obituary appeared in the Telegraph and The Guardian amongst other newspapers.
James Gowan, the architect, who died at the ripe age of 91, was responsible with his partner for the design of one of the most celebrated buildings of post-war Britain, the engineering department of the University of Leicester (1963).
While they were both in their early thirties, the two architects had launched their partnership on the back of a commission to design a complex of private apartments at Ham Common in West London.
Gowan developed a parallel career as one of the most influential teachers of his era having taught other architects who subsequently rose to prominence. Gowan was committed to the education of free-thinkers, not disciples. The obituary described him to have a very individual style.
All his papers and drawings have been carted off to a museum.
The property is spread over five floors, and there exists the possibility to extend by a further floor which will add circa 400 sq. ft., which means this should add about £700k to the end price if successful. It does beg the question if the property was occupied by an architect why did he not extend the property given the obvious rise in value and space.
It could be he did not need the space or wasn't interested in the rise in value, or perhaps when you are involved in projects for your clients you tend to neglect your own rather like the doctors who don't look after their own health, whilst instructing others to do so.
The property is a little odd in that the obvious thing to do from a development point of view is to turn it into flats, easy to rent and to resell.
However given the property is spread over five floors it makes the conversion cumbersome and would result in a large loss of internal square footage. As a house it has limitations as it does not have a garden, and someone spending circa £4m on a house would expect to have one. Saying this it seems the famous architect lived there for many years and was satisfied with not having one. This is what Hyde Park down the road is there for.
The location overrides all, this is the first rule of property, and here the location is supreme, close to Notting HiIl station. The north of Hyde Park has been earmarked for the highest growth in years to come by Knight Frank’s recent report, this location falls close to this region.
This is my limited analysis, which is not the means to go by. The architect is visiting today and this will shed more light on the best way to capitalise on this deal. It may be a combination of a roof extension and a division into two flats; the council policy on conversions will need to be taken into account.
It is an interesting project and one which will require a hands on approach for it to be successful. When undertaking this it is important not to follow your or the architects owns whims. It is important to note the distinction - he is an architect, not a commercially minded developer. For the project to be successful it needs constant collaboration with people actually on the ground, the local agents, for they are in touch with the buyers both from a rental and sales point of view.
The end goal is to capitalise on the project, for this to happen constant awareness of what the market wants and where it is going is important. I have seen large projects worth £8-10m take losses for this sole reason - the architect designed according to his own whims.
We are about to close the deal on a couple of more flats in Notting Hill in the next few days, these will be in the region of £650k, this equates to around £1,100 per sq. ft. representing a solid discount on day one. Call our office if you’re interested in these deals.