2-8 Hyde Park Gardens - Collective Enfranchisement
Knight Frank’s Leasehold Reform Department has recently advised The Church Commissioners for England on a collective claim to acquire their freehold interest in 2-8 Hyde Park Gardens, London W2. Hyde Park Gardens is considered to be the jewel in the crown of the Commissioners' Hyde Park Estate, with fully refurbished capital values achieving circa £3,000 per square foot.
The subject building consisted of 18 flats spanning over four buildings with lift and caretaking services. Not only do the flats have superb proportions and period features, those on the ground floor also benefit from large terraces and direct access to the award winning communal gardens. The flats on the upper levels have clear views looking south over Hyde Park.
The Leaseholders served their formal Notice of Claim in October 2014. Their initial offer for the freehold was £5,495,178 but they attributed no development value, nor a price for the caretaker’s flat. After some tenacious negotiations, the Leaseholder’s valuer acceded to our position on development potential in respect of the internal lightwells and under pavement vaults, and other alterations to a number of the flats.
We agreed Development Hope Value and Hope Value for the Non-Participating tenants’ flats at 15%. We believe that is an excellent result given the Lands Tribunal’s Blendcrown decision on the Estate several years ago, before Knight Frank won the overall property management and consultancy instruction, where only 5% was awarded.
The basement caretaker’s flat was also up for grabs. Our client was entitled to a leaseback, but following negotiations, we agreed a sale to the leaseholders because the valuation reflected an unimproved freehold rate of £1,350 per square foot.
The settlement was concluded without the need for a hearing before the First-Tier Tribunal, with a total unimproved freehold vacant possession value in the region of £140,000,000 and a total premium of £5,723,000, representing an increase of £227,822 from the leaseholders starting position.