FROM PARKING TO PENTHOUSES:
£1.3 BILLION OF PRIME RESIDENTIAL LAND LOCKED UP IN LONDON CAR PARKS
Figures from the latest Pastor Real Estate report reveal that converting a car park into a high-quality residential development could add up to 300% to the land value. Analysing a number of large multi-storey car parks across Mayfair and Marylebone the report reveals that 18 operational sites providing over 4,500 spaces currently conceal over £1.3 billion of prime development land.
Demand for property in prime central London continues to grow, whilst large-scale development sites are decreasing. This has led developers to turn to car parks in two of the highest performing districts that offer an increasingly rare prime opportunity, with strong potential returns.
Property values in Mayfair have increased by 69% in the last five years, making it one of London’s highest performing areas as residential prices average £2,400 per sq. ft. The highest transaction recorded in Mayfair in 2015 reached £5,000 per sq. ft.
Achieving similar levels, values in Marylebone have increased by 54% over the last five years. Typically residential prices average £1,500 per sq. ft., however, largely due to a number of new luxury developments and high-profile restaurants, the highest transaction currently recorded in 2015 achieved £3,000 per sq. ft.
Taking these figures into account the report calculates that the car park with the highest potential residential value is on Portman Square, Marylebone. Currently providing a value of £133.5 million (assuming an annual income at 4% yield), located on one of Marylebone’s finest garden squares the total residential value could reach £496.2 million (assuming £3,500 per sq. ft.).