CARRINGTON STREET MAYFAIR

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1 m a y f a i r 1

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3 Carrington Street is a once in a generation opportunity to acquire a 0.5 acre freehold development site in the heart of Mayfair. 4 1

4 m a y f a i r Executive summary > Carrington Street represents a generational opportunity to acquire a acre (0.196 hectare) freehold development site in the heart of Mayfair. > This truly unique offering would present a purchaser with an unrivalled opportunity to create a landmark and destination development in this super prime location. > The site offers a range of desirable alternative uses, subject to the necessary consents. > Potential uses include luxury residential, boutique hotel, serviced apartments, high end casino, private members club, art gallery, premium gym, restaurant and government embassies. > Positive pre-application discussions have been held with the City of Westminster regarding the redevelopment of the site, which has no listed buildings. > Carrington Street currently operates as a car park which is let to National Car Parks Limited on a lease expiring 28th May > The current rent is 224,574 per annum exclusive, which is subject to annual fixed increases of 3.00% received on 29th June each year. > Vacant possession of the entire site is achievable on 20 working days notice, subject to conditions. > Offers are sought for the freehold interest on an unconditional basis. 2 3

5 MARBLE ARCH P A R K L A N E P O R T M A N S Q U A R E P A R K S T R E E T HYDE PARK 2 P A R K S T R E E T GROSVENOR HOUSE P A R K L A N E M A N C H E S T E R MARYLEBONE N O R T H A U D L E Y S T R E E T S Q U A R E W I G M O R E S T R E E T W I G M O R E S T R E E T O X F O R D S T R E E T O X F O R D S T R E E T THE BEAUMONT 6 MARRIOTT GROSVENOR SQUARE G R O S V E N O R S O U T H A U D L E Y S T R E E T THE DORCHESTER P A R K L A N E S Q U A R E MILLENNIUM HOTEL 3 M O U N T S T R E E T BOND STREET THE CONNAUGHT MAYFAIR THE HILTON METROPOLITAN FOUR SEASONS D A V I E S S T R E E T C U R Z O N S T R E E T HYDE PARK CORNER 1 CLARIDGE S G R O S V E N O R S T R E E T S Q U A R E C H A R L E S S T R E E T 13 PARK LANE HOTEL 14 7 C A V E N D I S H P I C C A D I L L Y S Q U A R E 5 B E R K E L E Y H A N O V E R S Q U A R E N E W B O N D S T R E E T B R U T O N S T R E E T 11 THE MAYFAIR HOTEL B E R K E L E Y S T R E E T S T R A T T O N S T R E E T R E G E N T S T R E E T D O V E R S T R E E T C O N D U I T S T R E E T GREEN PARK GREEN PARK 11 9 FITZROVIA OXFORD CIRCUS THE WESTBURY 10 4 BROWN S HOTEL O L D B O N D S T R E E T ROYAL ARCADE DOVER STREET MARKET THE RITZ S A V I L E R O W 8 R E G E N T S T R E E T S OHO P I C C A D I L L Y S T J A M E S S T R E E T O X F O R D S T R E E T G R E A T M A R L B O R O U G H S T R E E T B U R L I N G T O N A R C A D E 12 THE STAFFORD HOTEL ROYAL ACADEMY DUKE S HOTEL G O L D E N S Q U A R E PICCADILLY CIRCUS J E R M Y N S T R E E T LE MERIDIEN PICCADILLY S T J A M E S S ST JAMES S ST JAMES S PALACE T H E M A L L S Q U A R E P A L L M A L L RAC Clubs & Restaurants 1. Cipriani 2. Le Gavroche 3. Scotts 4. Sketch 5. Hakkasan 6. Alain Ducasse 7. Annabel s 8. Cecconi s 9. Nobu 10. The Arts Club 11. Langan s Brasserie 12. The Wolseley 13. Le Boudin Blanc 14. Coya Location Carrington Street occupies a super prime location in the heart of Mayfair, London s most exclusive address. Mayfair acquired its name from the 15 day annual May Fair which took place between 1686 until The circa 275 acre village was originally developed as a fashionable residential district between the Mid-17th and 18th Centuries by a handful of landlords, including the Grosvenor family. Mayfair has retained its reputation as the pre-eminent residential, retail, hotel, office and luxury leisure district in London and the world, holding enduring appeal as the place within which to live, work, play and relax. The lasting appeal of the area is evidenced today by its popularity with residents and tourists who flock to Mayfair to benefit from its near unparalleled clustering of world class amenity. Mayfair is home to the world renowned shopping destinations of Bond Street, Mount Street and Savile Row, along with the fine art auction houses of Sotheby s, Phillips and Bonhams. The numerous additional Mayfair galleries and the presence of the Royal Academy of Arts combine to make London an international leader in the art world, alongside New York and Paris. Carrington Street is nestled in the south west quadrant of Mayfair, between Green Park and Buckingham Palace to the south, Hyde Park to the west and Berkeley Square to the north east. The high end luxury shopping destinations of Mount Street and Bond Street are only a short walk to the north and east, respectively. Shepherd Market is located immediately to the north of Carrington Street. This comprises a small square and piazza originally developed in the late 17th Century to host the May Fair. The enclave is tucked away from the hustle and bustle of Piccadilly and Curzon Street and provides a village-like atmosphere, popular for its excellent restaurants and bars. Approximately 60% of Mayfair s freehold titles are controlled by five estates, including The Grosvenor, Pollen and Crown Estates. This highlights the unique nature of this opportunity to control a acre freehold development site in this location. THE LANESBOROUGH BELGRAVIA G R O S V E N O R P L A C E C O N S T I T U T I O N H I L L BUCKINGHAM PALACE GARDENS BUCKINGHAM PALACE ST JAMES S PARK Not to Scale - For Identification Purposes Only. The presence of internationally acclaimed five star hotels, including The Connaught, Claridge s and The Dorchester, premium casinos, including Crockfords and Les Ambassadeurs, and some of the world s most exclusive and renowned private members clubs, including Lou Lou s, Annabel s and The Art s Club, add to the vibrant, highly fashionable, desirable and exclusive nature of the area. 4 5

6 Buckingham Palace Green Park Buckingham Palace Gardens Belgravia Hyde Park Corner Park Lane Hyde Park m a y f a i r Such a unique and prominent site of this scale in the heart of Mayfair is rarely seen. 6 7

7 Right Bond Street 7 minute walk London s most exclusive retailing street famed for its luxury fashion, jewellery, art and antiques offer, extending from the north to south of Mayfair. The street remains a playground for the elite over 300 years after it was founded. Left & Below Green Park 3 minute walk Above & Left One of the Royal Parks, comprising over 40 acres of mature trees and grassland located just to the south of Carrington Street. Shepherd Market A charming square and piazza tucked away in Mayfair and filled with restaurants, bars, galleries and boutique shops. 8 9

8 Right Royal Academy of Arts 6 minute walk The Royal Academy of Arts on Piccadilly, is an artist-led institution which promotes the practice, appreciation and understanding of art and its contribution to the world. The RA has trained some of the UK s finest artists, with past students including William Blake and John Constable. Left Mount Street 5 minute walk Home to the world famous Connaught Hotel, Mount Street is one of London s finest residential addresses. The street also boasts some of the world s leading luxury fashion retailers and restaurants. Left & Above Buckingham Palace 7 minute walk Carrington Street is located a short walk from the Queen s official London residence situated between Green Park, Hyde Park and St James s Park. The Changing of the Guard ceremony is a year round tourist attraction

9 Left Claridge s 10 minute walk This iconic hotel is the venue of some of London s best dining experiences, including fine dining at Fera and Afternoon Tea. Right Pall Mall 12 minute walk Pall Mall runs parallel to The Mall and connects St James s Street in the west to Haymarket and Trafalgar Square in the east. It is best known as the location of the Old War Office and the home of various gentlemen s clubs built in the 19th and early 20th centuries. Right & Below Burlington Arcade 8 minute walk This elegant covered shopping arcade opened in 1819 and contains around forty luxury retailers including Chanel, Lulu Guinness, House of Cashmere, Penhaligon s and Ladurée. Even today the Arcade is patrolled by Beadles uniformed in top hats and frockcoats. Left Berkeley Square 5 minute walk Fringed by the Lansdowne Club, Clermont Club, Annabel s and Morton s private members clubs, along with Michelin star restaurants

10 Communications Situation Carrington Street offers excellent connectivity, with Green Park (Victoria, Piccadilly and Jubilee lines) and Hyde Park Corner (Piccadilly line) Underground stations a short distance to the north east and south west respectively. These stations offer access to the wider London Underground network. Crossrail is scheduled to open in 2018 and will be accessible from Bond Street station which is a short distance to the north of Carrington Street. This will result in significantly reduced journey times from Mayfair to London Heathrow (26 minutes), the City (7 minutes) and Canary Wharf (13 minutes). The broadly rectangular freehold site is situated at the southern end of Carrington Street and runs parallel to Shepherd Street. The site, which extends to acres (0.196 hectares), is discreetly located, accessible only from Carrington Street, thereby offering one of the most secluded and private locations within Mayfair. The site is orientated west to east and extends approximately 95 metres in length. It is bounded on all sides by a mix of uses including mainly residential buildings to the north and west boundaries and office and residential properties, as well as other commercial uses, to the south. Within the immediate vicinity lies period mansion residences, bars, and an eclectic range of UK, French, Lebanese, and Middle Eastern restaurants, among others. The area also offers boutique independent shops, art galleries, casinos, embassies and private members clubs, all connected through a network of quaint streets and passages. Being situated in such a pivotal Mayfair location affords the site close proximity to the area s key attractions, including the retail and restaurant offering on Mount Street and Bond Street and the variety of luxury uses concentrated around Berkeley Square. The location provides easy access to the wide open spaces and pursuits at the Royal Parks of Hyde Park, Green Park and St James s Park. The key arterial routes of Piccadilly and Park Lane are within close proximity to the site. These provide private car links to the wider A-road and motorway network beyond London, and access to a number of bus routes. West Drayton Heathrow Airport Hayes & Harlington Southall Hanwell West Ealing West Drayton Heathrow Airport Southall Hanwell Hayes & Harlington Ealing Broadway Acton Mainline Paddington West Ealing Tottenham Court Road Farringdon BOND STREET Ealing Broadway Acton Mainline Liverpool Street Whitechapel Paddington Canary Wharf Stratford BOND STREET Tottenham Court Road Farringdon Liverpool Street Whitechapel Canary Wharf Stratford Bakerloo Central Circle District DLR Hammersmith & City Jubilee Metropolitan Northern Overground Piccadilly Victoria Eurostar Airport Links National Rail Bakerloo Central Circle District DLR Hammersmith & City Jubilee Metropolitan Northern Overground Piccadilly Victoria Eurostar Airport Links National Rail 14 15

11 3 CARRINGTON STREET MAYFAIR 46 47a Bank 6.9m 39a 39 The SITE The freehold site is currently occupied by a car park structure, comprising 170 spaces. The existing building extends to circa 60,000 sq ft over four levels. The multi-storey car park provides parking over lower ground, ground and first floors, in addition to roof level. Tenure a 52 HERTFORD STREET PH 50 Bank 2 to 5 Shepherd Market 55 2a 20 TREBECK STREET SHEPHERD STREET Shepherd Market PH34 7a 36 5b 5 5a MARKET 16 SHEPHERD PH Club PH Hotel 13 The site is held freehold, with the extent of the boundary edged gold on the title plan opposite (Title Number: NGL811553). Tenancy a to to 605 Carrington House 401 to to 211 CARRINGTON STREET to to 11 12a to 21 Garrick House 5d Club 5 12 WHITE HORSE STREET The property is let to National Car Parks Limited on a lease expiring 28th May to to to 8 22 to 33 5c The passing rent of 224,574 per annum exclusive ( 3.73 per sq ft) is subject to fixed increases of 3.00% per annum on 29th June. The rent will therefore increase to 231,311 per annum ( 3.84 per sq ft) from 29th June b Car Park 5 6 Vacant Possession The NCP lease can be terminated, subject to conditions, on 20 working days notice. Under the option to surrender, the landlord can call for the lease to be surrendered on giving 20 working days notice provided at any time prior to 31st December The landlord must have settled intention to redevelop to 35 BRICK STREET 37 to 49 Park Lane Garage St James's Club 1 to 4 YARMOUTH PLACE to Hotel b PICCADILLY NOTE:- Reproduced from the Ordnance Survey Map with the permission of the Controller of H.M. Stationery Office. Crown copyright licence number Savills (UK) Ltd. NOTE:- Published for the purposes of identification only and although believed to be correct accuracy is not guaranteed. 0m 10m 20mHotel 30m

12 Planning overview Carrington Street falls within the administrative boundary of the City of Westminster and is located within the Mayfair Conservation Area. The existing car park structure is not listed. There are Grade II listed buildings in the vicinity, including 8 and 9 Hertford Street, and 7 Shepherd Street. No listed buildings immediately adjoin the site. Carrington Street is located within the defined Central Activities Zone and is not restricted by any site specific designations. The use class of the existing property is sui generis. The site has been granted numerous planning permissions historically for the redevelopment of the car park, none of which were implemented and have since expired. These planning applications were determined against a different planning policy regime but the principle of redevelopment was considered to be acceptable. Recent pre-application discussions were held with Westminster Planning Officers in March 2012 regarding a wholly residential scheme. This proposed a residential net saleable area of 51,691 sq ft over seven storeys, five of which are above ground. A formal written response was received from Westminster, which confirmed: The loss of the car park would be acceptable, subject to appropriate justification. Redevelopment for residential would be acceptable. The massing and layout proposed is acceptable in design terms. Further detailed design would be required to ensure residential amenity is protected. The excavation of further basement levels may be acceptable, subject to appropriate construction management. The City of Westminster has identified a change in policy direction to resist the loss of B1 office floorspace to residential in the Central Activities Zone, within which Mayfair is located. As the site benefits from a sui generis use class, this policy will not be relevant to the site. A planning summary has been prepared by DP9, which considers the redevelopment opportunities for the site and is accessible on the dataroom. In summary, this confirms: Redevelopment of the site is encouraged. A range of uses including casino, residential, gallery and hotel are likely to be acceptable. Basement excavation remains acceptable, subject to adequate justification. Pre-application discussions with Westminster have confirmed that redevelopment is acceptable, with the sui generis use providing the potential for a wide range of prospective uses to be delivered

13 Redevelopment potential The unique nature of Carrington Street offers an unrivalled, scarcely available and generational opportunity to create a new address in the heart of Mayfair. The site offers fantastic development potential over both the upper and lower levels, and provides a blank canvas over which a multiplicity of different uses could be pursued. The existing car park structure is not listed, however it is within the Mayfair Conservation Area. The site benefits from a sui generis use class and is therefore less constrained by change of use policies. Consideration has been given to multiple options for its future redevelopment. The previous pre-application discussions and planning permissions have encouraged the redevelopment of the site for residential use, and also demonstrated the potential for significant development below ground. The freehold nature of the site does not place any restrictions in this regard. With reference to the pre-planning application process, and in association with Allford Hall Monaghan Morris (AHMM) Architects ( a number of indicative options have been prepared. These options have been assessed in relation to adjacent owners amenity and therefore represent a low risk option in terms of bulk and massing. The proposals seek to maximise the vast circa 20,000 sq ft floor plate and have regard to the opportunities and potential presented by the space both above and below ground. Three indicative options have been prepared, which highlight the potential of these spaces, and which are complementary in land use terms and interchangeable, subject to achieving the necessary planning permissions. An overview of these indicative options is included on the dataroom, alongside a planning summary prepared by DP

14 One of the many opportunities is to create a bespoke casino and private members club, as luxurious and discreet as Mayfair has to offer, with a boutique hotel complementing the exclusivity. OPTION A Option A demonstrates the opportunity to create a casino and private members club facility. These uses are concentrated below ground in the main but sit alongside a boutique hotel, which could equally be serviced apartments or have an element of residential over ground and four upper floors. A unique opportunity is presented by the site to create bespoke spaces in contrast to many of the conversion opportunities which characterise the Mayfair occupational market. The scheme provides the opportunity to create fantastic terracing space across the property whilst benefiting from complete privacy from surrounding buildings. A discreet access and drop off point could be included within the scheme, with the added benefit of being able to deliver secure underground car parking, if required. The central access to the site allows the separation of the upper floor and below ground uses. As shown in this instance, there is considerable synergy between the uses which provide a complementary offering. The total GIA of the scheme extends to over 80,000 sq ft. Numerous options exist in terms of how the different uses could be configured across the site. The conceptual scheme which includes prospective layout and massing options can be found at:

15 Indicative schemes option A Hotel rooms Hotel entry lobby Hotel cores Hotel terraces Members club/casino cores Members club/casino entry lobby Ancillary spaces Hotel and Members Club/Casino - Ground Floor Plan Hotel and Members Club/Casino - Basement 1 Plan Not to Scale - For Identification Purposes Only. Not to Scale - For Identification Purposes Only

16 The opportunity exists to design a unique art gallery of exceptional proportions alongside high quality residential apartments to create a new destination address in Mayfair. OPTION B Option B looks at an alternative use both above and below ground, focusing on the potential presented by gallery and residential use. A capacious gallery extending over three floors is proposed across the majority of the lower levels of the scheme. This space offers endless opportunities whether configured as a gallery characterised by metre ceiling heights or with the potential to include interconnecting mezzanine floors. As well as the sheer volume of space, the massing proposed creates voids to allow light to access the lower levels and extensive terracing to broaden the appeal beyond the internal showroom space. This option illustrates the residential opportunity extending over the lower ground to fourth floors and sitting alongside the gallery space. Again, the potential exists to create a fantastic sense of arrival to the residential and gallery, including a courtyard drop-off. This would allow a high quality residential scheme to be delivered commensurate with the best Mayfair has to offer and which would sit comfortably alongside the gallery use. The residential space could benefit from extensive private terracing, as well as car parking and ancillary amenities at lower levels. The conceptual scheme, based on conservative massing principles, suggests the potential to deliver circa 60,000 sq ft NIA split between the two uses. The 2012 pre-application scheme and advice highlights the potential to considerably increase the massing and residential floorspace. The conceptual scheme which includes prospective layout and massing options can be found at:

17 Indicative schemes option B Residential and Gallery - Ground Floor Plan Residential and Gallery - Lower Ground Floor Plan Residential flats Residential entry/lobby Residential cores Residential terraces Gallery Gallery cores Gallery lobby/entry Ancillary spaces Not to Scale - For Identification Purposes Only. Not to Scale - For Identification Purposes Only

18 Mayfair remains London s most sought after residential location for ultra high net worth individuals. Carrington Street allows the opportunity to deliver a luxurious residential development with the highest quality facilities. OPTION C The final indicative scheme prepared, Option C, proposes a solely residential development and draws on the design principles that underpin Option B. Option C focuses on a solely residential scheme which formed the basis of the 2012 pre-planning application and which was considered by Westminster to be acceptable in terms of land use and layout, subject to detailed design. This option has a reduced massing in comparison to the previous scheme. The residential apartments are shown across lower ground, ground and four upper floors. The design provides the opportunity to include ancillary residential facilities on the lower levels, as well as a level of car parking. As in the case of Option B, extensive terracing can be provided to create a spacious and private residential scheme. The indicative design balances the discreet nature of the location, whilst providing a sense of arrival and prominence to the apartments. The conceptual scheme which includes prospective layout and massing options can be found at:

19 Indicative schemes option C Residential flats Residential entry/lobby Residential cores Residential terraces Ancillary spaces Residential - Ground Floor Plan Residential - First Floor Plan Not to Scale - For Identification Purposes Only. Not to Scale - For Identification Purposes Only

20 Mayfair remains the premier residential address in London for ultra high net worth individuals. Residential market overview London continues to be the preferred destination for the global elite to both invest and live, with participants attracted to its prestige in addition to its connectivity, amenities and the quality of life it offers. In recent years, London in particular has been viewed globally as a safe haven for investment, particularly given its long standing political and economic stability, its time zone and the diversity of population. Over the past six years, the Prime London markets have been the strongest performing residential markets. As the first residential market to show signs of recovery since the downturn, prices are now 34.9% above their pre-credit crunch levels, with Mayfair experiencing the highest capital value growth with a rise of 41.9%. Ever since its development beginning in the 17th century, Mayfair has retained its status as one of London s most distinguished residential districts. Mayfair, alongside Knightsbridge and Belgravia, has long been identified as one of London s golden postcodes from a residential perspective. Whereas both Belgravia and Knightsbridge have been the focus for extensive new build development in recent years, Mayfair, in contrast, has seen the delivery of limited new build residential accommodation. Over the last 12 months, however, Mayfair has re-affirmed its position as the most sought after address amongst ultra high net worth investors across the globe with a pipeline of luxury residential schemes including: - Clarges Mayfair, which is being developed by British Land to deliver 34 new build residential apartments alongside commercial floorspace. British Land has exchanged on a number of apartments, achieving an average of 4,750 per sq ft with a selection of apartments achieving in excess of 5,000 per sq ft. - The Finchatton and ADIC Joint Venture redevelopment of 20 Grosvenor Square comprising 36 apartments. - One Grosvenor Square, owned by Lodha Group who have recently obtained planning permission for 41 apartments behind a retained façade. - The Joint Venture between Native Land, HPL and Amcorp at Burlington Gate, which is under construction and will deliver 42 apartments and gallery space. - The redevelopment of 77 South Audley Street by Luxlo to deliver circa 30,000 sq ft of new build apartments. - The proposed redevelopment of Audley Square Car Park, owned by Caudwell Properties, which proposes 30 new build houses and apartments. - Brockton Capital s consented residential led scheme of 31 apartments at 60 Curzon Street. The successful launches of Clarges Mayfair and Burlington Gate in particular has highlighted Mayfair s status as the preferred location for Ultra High Net Worth Individuals investing in London. It is expected that this will be re-affirmed through the delivery of the luxury residential schemes highlighted in the coming years. Although the Super Prime market has exhibited price stagnation and minor falls over the final quarter of 2014 and in to 2015, which is attributable to uncertainty around the General Election, significant price growth is anticipated between 2016 and 2019, as detailed in the below table. It is anticipated that following the delivery of the above schemes, a paucity of new build residential development opportunities in Mayfair could result from proposed planning policy changes by the City of Westminster. These restrictions on the change of use from commercial to residential will inevitably limit the future pipeline of development opportunities not only within Mayfair but the wider Central Activities Zone, which covers the vast majority of the West End. Accordingly, Carrington Street represents a fantastic opportunity to secure a scarcely available asset, which can deliver a luxury residential development with critical mass. Capital Value Inclusive Prime Central London -1.0% 8.0% 6.5% 5.0% 5.0% 25.5% Source: Savills Research 34 35

21 Luxury commercial market overview Hotels London was the world s most visited city by international tourists in 2013 and estimates for 2014 suggest a new high of 18 million visitors. This influx of overseas visitors is placing increased pressure on the city s relatively constrained hotel room supply, which currently stands at 6.0 units per 1,000 overseas visitors. This makes London one of the most undersupplied markets relative to its European counterparts. This relative undersupply is having positive implications in terms of operational performance. Both occupancy and rates increased over 2014 resulting in a 3.3% increase in revenues per available room (RevPAR), outperforming the 1.1% reported for Paris. Current forecasts for the London hotel market suggest additional improvements in operational performance, with PwC suggesting average annual growth of 4.6% in RevPAR over the next two years. London s international connectivity via road, rail and air, corresponding affordability and its enduring tourist appeal are the fundamentals which are driving demand for hotels in the capital. This is demonstrated by London s status as the top European destination for hotel investment in 2014, with 1.8 billion transacted. London s dominance of European hotel investment activity is largely due to the fact that hotels are a more established asset class in the UK. The UK s more accommodating employment and taxation systems have also been an added attraction. The greater availability of institutional grade stock and the sheer size of the London property market is also key. Previously considered as alternative, hotels are increasingly being accepted as a mainstream option in the UK particularly for long income funds. High demand for landmark London hotels as an investment asset is evident due to low levels of available stock and competitive pricing achieved on recent transactions. Deals around 100 million include the recent sale of St. Ermin s Hotel, comprising a 331 room Grade II listed hotel located in St James s, for 185 million, The Kingsway Hall Hotel sale in Q for circa 96 million and the sale of the Heron Plaza development site which has consent for a 190 room hotel in September 2014 for 97 million. Within Mayfair, and within close proximity to Carrington Street are a number of the world s most famous hotels, including The Connaught, Claridge s, Brown s, The May Fair, The Beaumont, The Dorchester and Park Lane Hotel. Serviced Apartments Serviced Apartments are fast becoming a thriving sub-sector of the UK hotel market following the trend of the well established markets in the US and Asia Pacific. Current supply in Central London stands just above 10,700 units, reflecting 1.7 units per 1,000 business visitors, the primary users of serviced apartments. This indicates significant undersupply relative to other global financial centres such as New York and Hong Kong where there are 5.7 and 5.1 units per 1,000 business visitors respectively. This relative undersupply is apparent in operational performance, which tends to outperform the hotel market. London will continue to be the main focus for operator expansion going forward as investors, developers and lenders become increasingly comfortable with the sector and are likely to view it as an extension of the hotel sector

22 Low supply has heightened demand for suitable restaurant and gallery space in prime Mayfair locations. Luxury commercial market overview Art galleries London is one of the largest art markets in the world, second only to New York. Galleries in London have traditionally clustered in retail units around the key dealerships and art houses, including Sotheby s, Christie s and the Royal Academy of Arts. This has focussed their location in Mayfair and St. James s, with the principal clusters forming on Bond Street, Cork Street and King Street. Demand from international gallery operators seeking a platform in London has intensified in recent years. These cash rich occupiers typically have larger requirements that cannot be fulfilled by the traditional retail unit offering. Intensified competition with fashion retailers for the best retail units on the prime pitch of Bond Street has seen established dealerships increasingly taking extensive space in the lower floors of Mayfair office buildings as an alternative. Significant gallery transactions in Mayfair which emphasise the breadth and depth of demand include the circa 100m acquisition of 30 Berkeley Square by Phillips, the pre-letting of 20 Grosvenor Hill to Gagosian at around 80 per sq ft, the letting of 5 Hanover Square to Blain Southern at over 100 per sq ft on the ground floor, and the letting of 23 Savile Row to Hauser & Wirth at 100 per sq ft. The only notable gallery space in the current development pipeline is 25,000 sq ft at Native Land s purpose built Burlington Gate arcade, due to complete in Q This imbalance in supply and demand indicates an opportunity to capitalise on this premium use class. The southern Mayfair location of Carrington Street is likely to appeal both to established international gallery operators seeking their first destination London premises, and galleries already established within the London market who are seeking larger, statement, second or third premises. Restaurants The London restaurant market is thriving, buoyed by dramatically increasing tourist numbers, as well as sustained domestic demand. As a result, the capital s leisure sector, including the restaurant industry, has reached a record high, with the current trend set to continue. Oxford Economics anticipate the UK will continue to leverage from its status as a leading global skills and employment hub, retaining its position as the number one international tourism location going forward. Low supply, due to a restricted development pipeline and the high number of restaurant units currently occupied on long term, protected leases, has heightened demand among restauranteurs for suitable space. The strong demand, coupled with competition for the best available space is fuelling rental growth. Similar to the prime luxury retail market in Mayfair, the restaurant market is now experiencing significant premium payments (key money) for the best units. Caprice Holdings, the holding company of restaurants including Scott s and The Ivy, acquired a unit on Berkeley Square at the end of 2014 at 190 per sq ft, in addition to a reported 10 million premium payment, setting a new benchmark. Mayfair, due to its exclusive reputation and wealthy residents and visitors, continues to hold enduring appeal to fine dining restaurants. There are 22 Michelin star restaurants within the locale, with new high end entrants including Le Chabanais at 8 Mount Street, and Park Chinois at 17 Berkeley Street

23 PICC MARBLE ARCH BOND STREET O X F O R D S T R E E T O X F O R D S T R E H A N O V E R S Q U A R E CARRINGTON STREET MAYFAIR G R E A T M A R L B O R O U G H S T R S OH N O R T H A U D L E Y S T R E E T P A R K S T R E E T G R O S V E N O R D A V I E S S T R E E T G R O S V E N O R S T R E E T Carrington Street falls within the centre of the high end Mayfair casino cluster, highlighting its potential appeal to an operator. N E W B O N D S T R E E T C O N D U I T S T R E E T R E G E N T S T R E E T G O L Luxury commercial market overview Casinos S Q U A R E Casinos Casino gaming is more popular than ever, with general UK gambling revenues up 17% in 2014 and the expectation that the industry will continue to expand. Supply remains relatively stable, however, at near 150 casinos nationwide due to the strict quota on the number of new casinos that can be developed across the UK imposed by The Gambling Act of This has led to a supply and demand imbalance for casino premises. In the five years to March 2014, overall casino drop, defined by the amount of chips bought and money fed into machines, increased by almost 2.5bn (58%) across the UK market, with the majority of this due to the increasing popularity of gaming among high value players. Over the same period, casino attendance in London has increased by nearly 80%. The UK is now generally accepted to be the top gambling nation in Europe. Westminster casinos Westminster has the highest concentration of casinos of any licencing authority in the country. It also has the greatest variety of casinos which cater for a highly tiered market which is defined by minimum and maximum staking limits, location, the nature of the building, the level of opulence and the quality of ancillary services such as restaurants and bars. Almost all of Westminster s internationally renowned high end casinos which are characterised by low volume, high value gaming, fall within what is known as the Golden Triangle, an area to the south of Mayfair which focuses around Berkeley Square, Curzon Street, Hertford Street and Piccadilly. Carrington Street falls within the centre of the Golden Triangle, highlighting its potential appeal to this high end gambling market. The site offers a unique opportunity for operators to design a scheme specifically for casino occupation. The provision of private on-site parking and the possibility of a drop-off point, emphasising discretion, differentiates this offer from other casinos. Casinos, particularly upper end casinos within Mayfair, rarely trade and almost never come to the open rental market. A number of them, including Crockfords, Aspinalls and The Colony Club, are owner occupied, with the remainder almost all occupied on long leases with fixed annual uplifts, or RPI indexation. The last casino property that traded openly was Les Ambassadeurs which sold in November 2012 at a net initial yield of 3.54%. The opportunity to create bespoke casino space in the centre of the Golden Triangle is incredibly rare, and could provide an opportunity for an existing casino operator to expand or relocate, or faciltate a new entrant to the market. P A R K L A N E P A R K L A N E P A R K S T R E E T HYDE PARK S O U T H A U D L E Y S T R E E T P A R K L A N E M O U N T S T R E E T MAYFAIR THE COLONY CLUB ASPINALLS THE PLAYBOY CLUB C U R Z O N S T R E E T CROCKFORDS THE CLERMONT S Q U A R E C H A R L E S S T R E E T P I C C A D I L L Y B E R K E L E Y THE PALM BEACH B E R K E L E Y S T R E E T S T R A T T O N S T R E E T D O V E R S T R E E T GREEN PARK O L D B O N D S T R E E T ROYAL ARCADE B U R L I N G T O N A R C A D E P I C C A D I L L Y THE RITZ CLUB S T J A M E S S T R E E T J E R M Y LES AMBASSADEURS HYDE PARK CORNER GREEN PARK C O N S T I T U T I O N H I L L ST

24 Luxury commercial market overview Private members clubs London remains a haven for private members clubs, with demand from both potential operators and their clientele showing little sign of abating. The waiting lists to join both traditional gentlemen s clubs and the more modern and accepting private members clubs typically vary between a number of months and decades, emphasising the continuing appeal of this form of entertainment. The most recent new entrant to the market is Robin Birley s club, Lou Lou s at 5 Hertford Street, a short walk from Carrington Street. More established clubs in the vicinity include Annabel s and The Arts Club, with annual membership fees of 1,250 and 2,000, respectively. Gyms The UK s health and fitness industry has experienced a boom which has culminated in a record number of clubs, members and market value. Fitness suites are essential features of quality residential and commercial schemes, and the UK s fitness revolution has fuelled the emergence of luxury gyms designed to appeal to residents and visitors to central London s exclusive neighbourhoods, such as Mayfair and Belgravia. This new breed of gym offers a boutique fitness service which is intimate and tailored, and which is generally housed in an environment which has the look and feel of a private members club to justify the premium membership fees they command. High end operators include Equinox, The Third Space, The May Fair Health Club and Ultimate Performance, where membership fees are some of the highest in London

25 website CONTACT DETAILS Further information can be found on the marketing website: For further information, or to arrange a viewing, please contact: Tim Whitmey +44 (0) [email protected] Fergus Keane + 44 (0) [email protected] VAT The property is elected for VAT. It is anticipated that the proposed transaction will take the form of a transfer of a going concern (TOGC). Jonathan O Regan +44 (0) [email protected] Andrew Boyd +44 (0) [email protected] Andrew Lowe +44 (0) [email protected] Candice Matthews +44 (0) [email protected] proposal Unconditional offers are invited for our client s freehold interest. Important Notice Savills, DTZ (the joint sales agents) and their clients give notice that: 1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. 2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and the joint sales agents have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. Designed and Produced by Savills Marketing: April

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