Office let Notting Hill, UK real estate fund manager, Frogmore pre-let 41,000 sq ft of offices at the Notting Hill Gate Estate to Blackstone owned serviced office group The Office Group (TOG) on a 20-year lease receiving a rent in the mid-£60s per sq ft, which it said was a record high for the area.
The redevelopment scheme at 92-94 Notting Hill Gate, designed by Squires Architects, is due to complete in Q1 2019.
Jo Allen, Chief Executive at Frogmore, said: “Having The Office Group in Notting Hill Gate is a great addition to the wider estate. Not only will they encourage more business, big and small to the area, but the letting continues the regeneration of the vicinity, to which Frogmore is dedicated.”
Charlie Green, co-CEO at The Office Group (TOG), says: “This is a very cool building in a very cool area. We’ve looked for years at this particular building and are really, really happy to have worked with Frogmore to finally land it. It’s part of stunning scheme, right on top of Notting Hill tube station, so we’re looking forward to creating a brilliant place to work here.”
The Estate also includes delivery of a 21,000 sq ft office building opposite which, whilst also being designed by Squires, will be completed in early 2019. Additionally, a further 25,000 sq ft will be available at 33 Notting Hill Gate in three years’ time.
Morgan Stanley is a co-investor at the Notting Hill Gate Estate, a multi-let, mixed use portfolio of retail, office and residential totalling 171,618 sq ft across four buildings. It is located in the Royal Borough of Kensington & Chelsea and is 2.5 miles to the west of Oxford Circus. Since acquisition in June 2015, as part of its third fund (Frogmore Real Estate Partners III), Frogmore secured planning consent across three of the buildings to preposition and extend the upper office parts to create a total of circa 95,000 sq ft of offices.
Pilcher Hershman and Frost Meadowcroft advised Frogmore on the offices lettings.
OLDER STORIES – Notting Hill Gate Estate
Morgan Stanley buys £91m stake in Notting Hill estate
By Richard Williams
Fri 11 December 2015
Morgan Stanley Real Estate Investing (MSREI) has acquired a 42.5% equity stake in Frogmore’s sprawling Notting Hill Gate Estate in west London.
A fund managed by the US investment firm has paid just over £91m to Frogmore Real Estate Partners III for a slice of the 171,000 sq ft estate.
The two companies have now formed a joint venture partnership to manage the site, which includes retail, residential and office accommodation. Frogmore will continue to lead the delivery of the investment business plan as asset manager.
The estate is let off relatively low rents with more than 80% of the total income currently derived from retail occupiers. The joint venture plans to reposition and refocus the offer.
The deal comes just six months after Frogmore paid £215m to the Pears Group and LaSalle Investment Management for the mixed-use site, which represented a yield of 3.22%.
The estate, which is close to Notting Hill Gate tube station, has the potential for the development of around 100,000 sq ft of new homes in a sought-after and valuable part of the capital.
“This is a great opportunity to invest in a collection of mixed-use assets in a prime London location where value can be added through asset management initiatives,” MSREI’s head of UK Shamik Narotam told Property Week.
“We look forward to revitalising and transforming the estate and are confident that Frogmore is the right partner to execute on that strategy,” he added.
The estate was developed by Land Securities in the 1960s, and is arranged across four blocks – David Game House, Astley House, West Block and 92-144 Notting Hill Gate – the last of which is home to a Recipease food and kitchen shop owned by celebrity chef Jamie Oliver.
Frogmore fought off competition from Grosvenor Fund Management in a joint venture with PSP Investments and Long Harbour to land the coveted estate in June.
Pears and LIM bought the estate in 2010 from Land Securities and Delancey for £130m and sold some of the individual buildings piecemeal, including Newcombe House and Hobson House.