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.