Three adjacent period buildings within the Royal Borough of Kensington and Chelsea, one of London’s most sought-after villages, have been acquired by private equity real estate investor Henley for £21 million.

The properties, which are situated within close proximity to Hyde Park and the High Street Kensington shopping district, comprise around 23,000 sq ft of space in total. Henley plans to redevelop the buildings into high quality residential accommodation, with an anticipated gross development value of £53 million following development.

The main site, which was formerly a hostel and consists of two buildings, has full planning consent for conversion into 12 private residential apartments across 16,878 sq ft and Henley intends to initiate construction works immediately. The third building is currently operated as a 23 room house of multiple occupancy, comprising 6,217 sq ft. Henley will apply for planning consent to convert the building into fifteen studio apartments with a construction start date targeted for early 2016.

An IRR of 20%+ is being targeted by Henley, at exit, following the redevelopment works.

Commenting on the acquisition, Ian Rickwood, Chief Executive Officer of Henley, said:

“This acquisition provides a unique opportunity for us to carry out extensive value add works and create high quality residential accommodation in an attractive, highly sought after area of London. We are confident that the development plans we have in place, will ensure we are able to generate lucrative returns for our investors upon completion.”

Established in 2006, Henley is a leading UK private equity real estate investor focusing on development, investment and asset management in the commercial, residential, healthcare and debt real estate market. Since its inception Henley has doubled in size every year and is expected to do the same again in 2015. The company currently has around £500 million assets under management (as of May 2014). Since its inception Henley has created over 40 SPV Funds, exiting 11 with an average performance of 53.6 per cent deal IRR.

29 May 2015 | Article by PJ Appleton, Clare Hartshorne – Redwood Consulting