ESTATE agent Savills has made the first two purchases through its prime London residential fund, betting on adjacent Chelsea properties as demand for high-end living space in the capital continues to grow.
Cordea Savills, the international property fund manager owned by Savills, has paid around £40m for a former chapel and a former college building between the Kings Road and the Fulham Road.
“Ever since the banks made it clear that they were not prepared to lend on property development, at least on workable terms, there has been a dearth of development,” said Cordea Savills head of residential development Brian D’Arcy Clark.
“This has led to a shortage of newly-built units in prime London locations despite ever increasing demand.”
Cordea Savills closed its first development fund in June with a £25m equity injection from a private bank. It targets an internal rate of return of 18-20 per cent each year through financing prime London residential developments.
In addition to yesterday’s purchases, Cordea Savills also announced a tie-up with high-profile revival developer John Hunter, the founding partner of Tenhurst.
Hunter’s past projects include the redevelopment of a portfolio of desirable London addresses including The Bromptons, Earls Terrace, and a six-storey Victorian terrace on Tregunter Road in Chelsea, which was sold in 1993 for £7.7m to be the Ambassador’s residence of the Royal Thai Embassy.