Great Portland Wins Approval for $770 Million ProjectNeil Callanan
Great Portland Estates Plc won local-government approval for what could be its most profitable project: a plan to replace a mail-sorting center near London’s Oxford Street with homes and office buildings.
Great Portland, the property developer focused on London’s West End, plans to build 162 apartments and 33,000 square meters (355,000 square foot) of workspace at the Rathbone Place site. The Westminster Council voted in favor of the development today. The 483 million-pound ($770 million) project may generate a profit of 97.5 million pounds, JPMorgan Chase & Co. analysts including Tim Leckie wrote in an Oct. 8 note. It would be the real estate investment trust’s biggest gain from a development, based on estimated future profits, Leckie said in an e-mail.
Developers have been buying sites near the Tottenham Court Road underground stop, betting a high-speed rail line connecting Heathrow Airport to Canary Wharf will boost values when it opens there in 2018. Office rents in London’s Fitzrovia district rose 8.3 percent to 65 pounds a square foot in the year through June, according to Knight Frank LLP. In Mayfair and St James’s, home to Europe’s largest concentration of hedge funds, they average 95 pounds a square foot, unchanged from a year earlier.
Great Portland, based in London, paid 120 million pounds for the 2.3-acre (1-hectare) site in 2011. It bought an additional site between Rathbone Place and Oxford Street, the U.K.’s busiest shopping thoroughfare, for 90 million pounds from Land Securities Group Plc in July.