One of London’s most hated towers is to be transformed with the use of Institutional money aiming to build thousands of homes specifically for rent.
Essential Living has acquired the leasehold to the 16-storey Archway Tower for £6m from Valad Property Group.
With a Premier Inn reportedly going up next door, the site will be one of the country’s biggest office to residential conversions, made possible under Government planning changes introduced this month.
Backed by $200m of equity from M3 Capital Partners, who manage U.S. institutional funds, Essential Living plans to design, build and manage 5,000 rented homes across London and the South East.
They aim to replicate the successful multi family lettings sector in the U.S. through buying up land to develop rental homes. These will then be directly managed over the long term. Benefits will include longer tenancies, an array of communal services and professional, round the clock onsite service.
Archway is Essential Living’s fourth acquisition following recent deals in Swiss Cottage and Bethnal Green, east London. They have a pipeline of around 1,000 homes.
The brutalist 80,000 sq ft office block was completed in 1963 above Archway Tube station. It was used by the Department for Social Security during the 1980s, but fell vacant in 2012 after the Office of the Public Guardian was relocated to Birmingham.
At 195 ft high, the tower and maze-like gyratory system it overlooks, has come to symbolise the neglect that has befallen Archway, which sits next to trendy Highgate and leafy Hampstead to the north of Camden,
English Heritage had previously added the building to a hitlist of buildings to be demolished. But council feasibility studies put the cost of doing so at over £15-20m, in addition to the huge disruption it would cause.
In 2012, local artist Ruth Ewan used funding from Islington Borough Council and Central St Martin’s college to produce a book and so-called ‘diminished reality’ project where residents imagined a tower-less skyline.
With the tower set to stay, Archway could soon be home to one of the biggest regeneration projects in the country.
As well as creating over 100 vital new homes to rent inside the tower, Essential Living’s redevelopment will form part of a wider mixed-use regeneration story that should delight locals.
Property agents GVA acted for Essential Living in this transaction. Transport for London continues to own the freehold to the building which is situated at 2 Junction Road, London, N19. As part of the transaction, Essential Living have also secured the right to acquire all other leasehold interests in the building for £3,000,000. It is anticipated the company will in total be investing over £30,00,000 to bring forward the gentrification of this unsightly building.
Scott Hammond, executive director at Essential Living, said: “With ownership properties out of reach for most Londoners, there’s a huge need for professionally managed rented homes perfectly positioned above key transport links. We are looking to draw on the experiences and successes gained from the American rental model which designs homes specifically for rent and is far more workable than buying up existing homes that developers haven’t been able to sell.
“We are determined to offer renters the quality and service currently missing from the fragmented private rented sector which are largely owned by individual landlords.
“Archway deserves regeneration and we believe our investment will be the catalyst to further gentrification in this important North London community.”
