First appeared in Bloomberg News
Northacre Plc, developer of The Lancasters luxury
apartments opposite London’s Hyde Park, plans to build less-expensive homes to increase
returns on projects, the company’s finance director said.
The homes will be priced at 1,000 pounds ($1,580) to 2,000
pounds a square foot in neighborhoods such as Fitzrovia, Marylebone and
Bloomsbury, close to costlier areas like Knightsbridge and Mayfair, Ken MacRae
said in an interview today. That compares with 3,000 pounds or more in The
Lancasters.
“It won’t be a traditional prime Northacre development,”
MacRae said in Cannes, France. “These are areas on the fringes of prime central
London that are undervalued. We can deliver a better product than what’s out
there at the moment.”
The Lancasters drove a surge in Northacre’s share price in
2010 and sales triggered a 50-50 profit split on the project between the
company and venture partner Minerva Plc. The apartments in the
192,000-square-foot (17,800-square meter) former hotel were priced from 900,000
pounds to 16.5 million pounds.
Northacre is seeking to buy office buildings and convert them
into “mid-market” homes, MacRae said. The projects will be sold under a
different brand from Northacre, he said.
“A lot of offices are being marketed as residential and
we’re interested in that,” he said. “We want to introduce a sub- brand of
Northacre.”
Overseas investors have turned to London’s residential
real estate to preserve wealth as they face political and economic uncertainty
in their home markets. The value of houses and apartments costing an average of
3.7 million pounds rose 0.7 percent from January and are now 8.9 percent higher
than the market’s previous peak in March 2008, according to property broker
Knight Frank LLP.
About 66 of the units at the Lancaster have been sold,
according to Claire March, the company’s sales and marketing director.
Northacre will acquire no more than two new development sites within the next
nine months, she said.
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