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Three in One

24th February 2021

I saw a very interesting property over the weekend, in Pinner NW London.

The property is a vacant retail unit at the end of a parade, consisting of three floors.  It is a slightly funny shape, but the square footage is generous for the price, 2,000 sq. ft. for only £600K; equating to £300 per sq. ft.

The angle is that you could easily add another two floors to this property; adding about 40% extra sq. ft.  As well has changing the existing property into residential under permitted development.

The floors would be added via planning, so a slightly longer and different process than permitted development.  But it seems non contentious.  At the end of the project you should have a property with 3,300 sq. ft.  If you apply the residential £ per sq. ft. of £500, which is perhaps a little conservative for the area, you end up with a value of £1.6M.

The build cost should be, to my untrained eye, not more than £300K- £350K.  Therefore, this is a rare deal, which allows you the certainty of conversion to residential, and the cherry on the pie will be the additional 2 floors subject to planning.

The project would be carried out in two phases.  The permitted development phase, which is a certainty, would be applied first, this would be obtained in 56 days.  The cost of implementing this would be £150K, giving an end GDV of £1.2M.

The 2nd phase would be via planning which, from an initial observation, hopefully should come through; even if it doesn’t you have bagged the permission to convert from commercial to residential.

The extra floors would be an additional gain.  You have already made your profit with certainty through the PD.

This deal is a no brainer, and it is within the budget of many investors; it is a rarity, from the affordable price point, location, the value add, and certainty.  Interested investors will need to move quickly before they miss this gem of a deal.

Suresh Vagjiani

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