Thames-side property in vogue for Berkeley

Tony Pidgley's Berkeley Group is continuing its acquisition drive by becoming frontrunner to buy two blocks on Millbank, SW1.

The residential developer has seen off bids from British Land, Derwent London and a Qatari investor and is in detailed discussions to buy PRUPIM's 9 Millbank and the adjoining Ergon House on Horseferry Road.

The properties, which were marketed for £70m - a 6.7% yield - and £32m - a 9.5% yield - respectively, have potential for residential redevelopment.

Agents said bidders were attracted to the combination of a strong investment building and an asset with scope for redevelopment.

The 128,000 sq ft 9 Millbank is let to the government until 2032, generating around £5m pa, with a break option in 2017. Selling agent Savills said it had potential to be converted for residential or hotel use.

Leases on offices at the 93,500 sq ft Ergon House will expire in just over two years.

Proposals drawn up by Sheppard Robson have identified two options: a sole redevelopment of Ergon House, or a combined redevelopment with 9 Millbank.

One source said: "A lot of focus has been on the south of the river. But a few opportunities have come on the market on the north side. It shows a resurgence for this residential development patch."

All parties declined to comment.

 

annabel.dixon@estatesgazette.com

 

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