Pune-based ABIL Group buys London building for close to £100 million
6th June 2018: In a closely contended auction, Pune-based realty developer ABIL Group has procured an eight-story industrial building at Trafalgar Square in London for nearly £100 million, or Rs 900 crore, from American global investment management corporation Black-Rock. The deal value comprises stamp duty of 5% and other charges that have been paid as the enrollment has been inferred.
The freehold property, 5 Strand Trafalgar Square that scores Westminster Council as a key tenant, witnessed interest from over 22 global entities including developers and investors from China, Europe, and India. New York-headquartered BlackRock, the erstwhile owner of the estate, had set the reserve price of £80 million for this iconic building.
Among the repositioning and redevelopment options, the site already has unconditional planning consent for a new development of over 1.53 lakh sq ft gross internal area (GIA) of office, residential and retail components arranged across the basement, ground level and eleven upper floors. The property also offers an option of developing up to 250-room luxury hospitality project. Currently, the property has around 1 lakh sq ft office and retail area.
While BlackRock refused to comment on the story, ABIL approved the transaction. “We at ABIL Group under our hospitality business have always produced hotels at landmark locations. London as a destination ranks in the top three choices when one is acknowledging global expansion. This is an exciting possibility for us as Trafalgar Square is a globally identified location and has the potential to build a world-class luxury hotel,” Amit Bhosale, managing director, ABIL, told ET
ABIL Group is projecting to redevelop the property into a five-star hotel with 210 to 230 keys inventory with an additional investment of over £80 million, or over Rs 715 crore, he said. The group led by Avinash Bhosale already has four luxury hotels with a total of 944 keys in its hospitality portfolio in India. This includes St. Regis in Mumbai, W Goa, The Westin in Pune and Le Meridien in Nagpur. The proposed project marks ABIL’s foray into international markets and the group will be studying different global locations for more such opportunities.
The company has supported the transaction through its internal accruals and debt raised in international markets. It has begun the process to seek approval to redevelop the property and is aiming to complete it in the next four years.
In addition to global institutional investors, London property market has been attracting established Chinese, European, Middle-East and Indian developers over the past few years. BlackRock, which manages around $6.32 trillion in assets on behalf of investors worldwide, also held 5 Strand Trafalgar Square since 2012.
The Lodha Group has acquired two properties for redevelopment in London for Rs 4,000 crore. In early 2014, the group bought a building on Carey Street in London for over 90 million pounds, or about Rs 1,000 crore. In November 2013, it had acquired MacDonald House in central London, which housed the Canadian consulate in the UK, for over 306 million pounds, or Rs 3,120 crore.
Another Indian developer, Indiabulls Real EstateNSE 4.62 %, paid £155 million, or Rs 1,550 crore, then for a business property in London's Mayfair, an upmarket London area, and home to the significantly moneyed. It is currently building a luxury project including 80 branded and serviced luxury Mandarin Oriental Residences and a fully-integrated Mandarin Oriental Hotel with 50 guest rooms and suites