Office to residential development: Union Park, Uxbridge, UK

– Client Property (Fprop PDR LP)
– Purchase (Aug 2012): £8.25m
– Sale (May 2015): £18.30m
– Net profit: £9.18m
– Hold period: 9 months
– IRR: 108% (unlevered)

We acquired this 80,000 ft2 office park in Uxbridge, West London, in August 2014 on behalf of Fprop PDR LP, a £42 million fund established in 2013 in response to amendments to Permitted Development Rights (PDR) legislation. The aim was to invest in offices eligible for conversion to residential use.

We purchased it for £8.25 million, equivalent to around £100 per ft2. It was 72% vacant at purchase but sat in an attractive location next to the Grand Union Canal some 1.5 miles from Uxbridge Tube and West Drayton Mainline Station. We sold it 9 months later for £18.3 million, having secured permitted development rights to convert it into 190 residential units. The sale price was equivalent to around £225 per ft2, an uplift of some 125% from purchase. The sale generated a ROE of 111% and an equity multiple of 2.1x.

In aggregate Fprop PDR LP earned a net return on equity to its investors of 53% and an IRR of 98% – all without the use of leverage.