Commercial & Development
4th QUARTER 2020
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Attractive end-of-terrace house on a comparatively large plot…
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Prominent corner site in ‘North Heath’ with consent for 9 two bed flats…
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Freehold pub in camberwell let at £75,000 pa with 17 years remaining…
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The Acorn Book Club goes from strength to strength…
EDITORIAL
Jeff East — Director
jeff.east@acorngroup.co.uk
To say that 2020 was challenging is clearly somewhat of an understatement, and at present, it doesn’t seem that the start of 2021 will be any easier. It isn’t lost on me though, that our industry hasn’t suffered greatly from the Coronavirus pandemic. As a result of circumstances entirely out of their control others have been nowhere near as fortunate. We’re very sorry for those that have lost loved ones, and for employees, employers and the self-employed from the worst affected sectors including travel, tourism, hospitality, leisure and retail. As a Board, we’re incredibly grateful to our staff across the Acorn Group. Some had to endure ill health, family losses and frustrating, and no doubt worrying periods on furlough. Others worked 7 days a week to keep our clients and the business moving. Since we were able to re-open in May our teams have worked tirelessly to operate safely, and to consistently grind out deals. Many are still working from home, but their commitment is unwavering.
2020 results for the Commercial & Development Division have been very good. Were it not for Covid the team would have exceeded all their targets, and numbers aside we’ve achieved several of the objectives we set for ourselves
in December 2019; the most important being to strengthen the team. Adam Miles and Izaak Thomas have blossomed in the face of adversity, and are relishing the challenge of 2021. The Acorn Head office team will be also moving to a brand new, landmark HQ early in the first quarter. I’m not brave enough to predict what 2021 will bring, but we’re certainly not expecting an easy ride. The major hurdles include Brexit (remember that?), removal of the SDLT holiday, the continued dependency on Help To Buy and the end of furlough. On the plus side though we’ve got record-low interest rates, and…, well…, a seemingly willing market at least. Regardless, I know very well that our staff will continue to pull out all the stops to maximise value for our clients. This update reports on several noteworthy deals that we’ve been able to conclude under challenging circumstances, and also illustrates the diverse range of opportunities that cross our desks. Local knowledge, real-time sales information and a can-do attitude are more important than ever, so if we can be of assistance in any way, please don’t hesitate to get in touch. Wishing you a healthy, and with some trepidation, a prosperous New Year.
BERMONDSEY SE1 The first of several more traditional ‘residential’ sales completed during the final quarter of 2020. We have a network of 40 sales offices and an army of expert residential staff, but every now and then they call us in to look at a property that offers a little something extra.
Our London Bridge branch asked us to advise the seller of this attractive end terrace house in a pretty Conservation Area on how to maximise value. The property sits on a comparatively large plot, requires modernisation throughout and offers limited angles for development. Given its location and obvious potential, we were confident of achieving more than the open market value of c.£750,000 that our resi colleagues had recommended. High quality particulars with floor plans and professional photography were circulated throughout our database of some 15,000 applicants, and a host of first ‘viewings’ were conducted via HD virtual tour. A strictly limited number of physical viewings were arranged with seriously interested parties, and more than a dozen offers ultimately received.
Whilst the marketing was ongoing, interest was shown by a neighbour who needed to sell in order to buy. Working closely with branch colleagues the neighbour’s house was listed, and put under offer within a fortnight. Keen to stay locally but move to a bigger house, the neighbour bid higher than the professional
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St. Marks Road, Bromley, Kent BR2 9HG 020 8315 5454
developers and investors that had shown interest. Both sales were concluded promptly, and having achieved almost £250,000 above the open market value, it’s fair to say that our client was delighted!
2 North Street, Strood, Kent ME2 4SH 01634 969678
VAUXHALL SW8
CURRENTLY FOR SALE...
Our first involvement with this industrial building in Vauxhall dates back to 2012. Fast forward 8 years and the owner approached us for some advice having seen planning permission granted for a tower on the adjacent property. Whilst appraising the development potential, we quickly took the opportunity to let the redundant building for use as a temporary site office for the new tower. Our advice is always tailored to the specific nuances of a given property, and the wants & needs of its owner. In this case the property offered obvious development potential, but also some sentimental value and an income stream to the client. Whilst the owners were keen to see the site developed, they were adamant they wanted to stay involved throughout the project despite having no construction expertise or experience themselves. Fast-forward 6 years, and with construction only recently having been started, it’s safe to say that the owners under-estimated how timeconsuming, expensive and frankly draining it can be navigating the planning process in Central London. Nevertheless, with permission imminent and the client’s commitment to the project unwavering, we introduced a development partner experienced in delivering urban schemes on a joint venture basis. The structure of the deal will ultimately see the freeholders receive brand new commercial space and residential apartments in lieu of a cash land payment. They will retain both an interest in the site, and an income from their investment – mission accomplished! Joint venture deals are never straightforward, and don’t suit every site or landowner, but on occasion they can prove to be the ideal solution. If you think you’re brave enough for a JV, please ring Tom Luck (not me!)
120 Bermondsey Street, London SE1 3TX 020 7089 6555
ELTHAM SE9 Prime freehold site in the very heart of Eltham town centre. Extending to a quarter of an acre and comprising a c.9,000sqft derelict warehouse, the site offers obvious redevelopment potential. Previous schemes for 46 & 42 units recommended by Officers, but refused by Members. Adjacent site under development by LB Greenwich. Unconditional sale sought. OIEO £2,800,000 F/H
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
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NORTHUMBERLAND HEATH DA6
The Acorn Group has opened 7 residential agency branches in the LB Bexley over the last 36 months, and as a result our work with development opportunities in the borough has increased exponentially. At the time of writing we have three live planning applications for clients, five projects on site and several opportunities for sale; including one with consent for 25 units, and another with potential for 30+. Our track record for land sales in Bexley during 2020 has also been very good, and there’s no doubt that the real-time sales evidence shared by our New Homes Division helps breed confidence in potential buyers, and ultimately drive the residual land value. This prominent corner site in ‘North Heath’ has a very smart consent for 9 two bedroom flats, but wasn’t without its troubles. Our client only had possessionary title on half of the site, and as such getting a sale to stick (particularly in the midst of lockdown) was never going to be easy. We worked closely with both solicitors and the buyer’s bank to put indemnity cover in place that would satisfy all parties. The site is opposite our Northumberland Heath office, so the branch team are very excited to ‘Acorn’ the hoardings! If you’re selling a consented development site in the current climate it’s vitally important that your agent has access to real-time plot sales evidence. Land Registry records can be up to 6 months behind the market, and in any event, better to pick an agent that makes the market rather than follows it…
CROCKENHILL BR8 The second ‘residential’ sale completed in late 2020 was the result of a recommendation from our agency branch in Swanley. They had been asked to value this detached bungalow for probate purposes, but quickly noticed the potential offered by the large garden. Having confirmed an open market value of c.£400,000, we visited in order to ascertain whether a development premium might be achievable. Confident that it would, we launched a high profile marketing campaign inviting offers in excess of £450,000. Interest was forthcoming from local developers and ambitious owner-occupiers, and similarly to the Bermondsey sale reported earlier, we received more than a dozen credible bids on the deadline. Developers filled most of the top spots, but the stand-out bidders were a young couple with big plans to create a dream family home. With cash on the hip there was nothing to hold them back, and contracts were exchanged inside a month.
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St. Marks Road, Bromley, Kent BR2 9HG 020 8315 5454
The final sale price, by the way, was £530,000 – a premium of more than 30% over the OMV! You’ll notice a pattern emerging from these reports – there’s real demand for freehold residential property that offers any sort of angle, but it takes an expert approach to extract the full value. We’re able to create the competition that drives the bidding, and have the expertise to ensure that sales at premium prices stick.
2 North Street, Strood, Kent ME2 4SH 01634 969678
CAMBERWELL SE5 In early 2020 we were asked for advice on the likely value and appeal of this attractive pub that shares a name with Del-Boy’s favourite boozer. In its favour the property has bundles of character, and enjoys a prominent position in the popular suburb of Camberwell. Beyond that though, reality bites. The tenant is a private publican with no real covenant strength, the building offers little or no development potential and was offered to the market at a time when every pub in the land was closed due to Covid-19. Nevertheless, we remained confident that the fundamental opportunity to acquire an attractive freehold in SE5 would generate the right interest. Let at £75,000pa with 17 years remaining, we guided at £1M; reflecting a 7.5% gross return. Interest was good and we were able to create competition between two standout bidders. We ultimately agreed a sale with a cash buyer at £1.08M who exchanged & completed in under 4 weeks. To give some context the buyer is a regular in the pub himself, fully intends to support the incumbent landlady but will happily adopt the role of Mike Fisher and pull pints if he has too. Lovely Jubbly! Local expertise and tailored marketing advice is more important than ever. In this case we managed to achieve full market value for a leisure investment with no covenant strength to speak of, and at a time when the tenant wasn’t allowed by law to trade.
STREATHAM SW16 The last of our residential-related reports for this issue concerns an unusual freehold sale in a lovely part of Streatham. Our Streatham branch were contacted during lockdown by a French family keen to sell their property, and move home to central France. There’s nothing particularly unusual about people moving abroad, but in this case the clients had two adjoining houses, and would only consider a sale as one lot! As this opportunity would only be viable for a professional buyer, our branch colleagues got us involved. The period house to the right hand side was in good order, but appeared to offer potential for conversion into several apartments. The detached house to the left was far more recently built, and was more suitable for occupation by a single family. The gardens were landscaped as one, and as such a reasonable amount of work would be required to sub-divide the properties. Our marketing campaign generated interest from large families, investors, developers and institutions, and several offers in excess of the £1.5M guide price were received. With elderly family to consider, our clients were particularly keen to move as quickly as possible. A cash offer a little ahead of
120 Bermondsey Street, London SE1 3TX 020 7089 6555
the guide was accepted, contracts exchanged promptly and completion dealt with before the UK’s second lockdown. We love a challenge, so if you have a residential property with an angle, or a slightly unorthodox asset to sell, please give one of our offices a call.
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
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IN A NUTSHELL
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GREENWICH SE10
SUTTON-AT-HONE DA4
Tardis-like commercial freehold comprising offices and consulting rooms over basement, ground and first floors. Well-located on a busy thoroughfare, we sold the vacant property for a private investor.
Pretty freehold offices sold for Sutton-At-Hone Parish Council who kindly said… “We have just completed our sale, all went according to plan and we are very happy with the process”. Job done!
ANERLEY SE20
EAST DULWICH SE22
Vacant mixed-use commercial freehold adjacent to Anerley Station comprising two shops and two flats arranged over basement, and three upper floors. Promptly sold to a cash investor for £1.25M.
We’re as busy as ever managing interest in commercial units on good quality secondary parades. This 450sqft corner unit was recently let to a skincare professional at £29,000pax – that’s £64/sqft!!
DAGENHAM RM8
KENLEY CR8
Unbroken freehold investment comprising a shop and 3 bedroom flat subject to a wrapped lease to the same tenant since the 1960’s. Passing rent £33,000pax – sold for £440,000; a 7.1%NIY.
Redundant commercial building with full consent for demolition and construction of a new three storey block to comprise a studio, and 5 one bedroom flats. GDV c.£1.6M – sold for £575,000.
CATFORD SE6
GROVE PARK SE12
Substantial lock-up shop extending to c.2,300sqft and fronting the A21 in Catford’s busy centre. Let to an independent supermarket at £30,600pax. Similar instructions required across Greater London.
Irregular-shaped site just a short walk from Grove Park Station with full planning permission (and foundations laid) for 8 new houses. Sold for one private developer to another at £1.75M.
St. Marks Road, Bromley, Kent BR2 9HG 020 8315 5454
2 North Street, Strood, Kent ME2 4SH 01634 969678
MEET THE TEAM
Jeff East Director
Tom Luck Director
Lily Whitby Senior Secretary
Steven Flannighan Commercial & Development Agency
Louis Markham Commercial & Investment Agency
Jamie Stevenson Commercial & Development Agency
Rosie Davis Team Secretary
Adam Miles Commercial Agency
Could This Be You? If you are interested in joining our team, please send your CV to lily.whitby@acorngroup.co.uk Izaak Thomas Commercial Agency
LE SA R FO
FO
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SA
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JANUARY SALES!...
BEXLEYHEATH OIEO £2.9M
DARTFORD GUIDE £695,000
CROYDON OIEO £4M
Prominent office building with PD for conversion to 18 units, and consent for a further 7 flats. Further potential stpp.
Vacant freehold site with full planning permission for a new block to comprise 11 flats and a ground floor commercial unit.
Freehold site approx. 0.43 acres close to East Croydon Station. Full consent for 43 new flats across two contemporary blocks.
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
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ACORN BOOK CLUB We believe all children should have free access to a wide range of books, and we work with local schools and communities in pursuit of that goal.
The Acorn Book Club (ABC) is a registered charity operated by The Acorn Group. We work with the public, our clients, and our staff to ensure amazing pre-loved children’s books get into the hands of local schools, hospices and organisations who do not have access to funding to purchase them from new. Have your children grown out of the books they once adored? Do they now sit unused and collecting dust? Why not donate them to the ABC? Donations can be dropped to any Acorn, Langford Russell or John Payne office within our extensive London and Kent branch network. We then redistribute these books locally, with the aim of promoting a life-long love and passion for reading!
acornbookclub.co.uk Keep up to date by following:
@acornbookclub
Visit the new home of property in South East London and Kent. Our brand new website brings together all The Acorn Group brands, divisions and services under one simple URL. Whatever your property requirement, visit acorngroup.co.uk/about today and see how we can help!