Nestlé Tower, SEGAS House and St George’s Walk in Croydon town centre have been sold to a Chinese development company in a £60million deal.
Nestle Tower: once Croydon’s tallest building, now under new ownership
Property Week is reporting that R&F Properties has made the move, its first venture into European real estate.
Minerva, who bought the tower for £10million in 2015 from L&G, stand to make a handsome profit on the transfer of the 200,000 sq ft tower, the 250,000 sq ft St George’s Walk and nearby SEGAS House, which has listed building status.
St George’s House, the formal name for the Nestlé Tower, was built in 1964 and was the UK head office for the Swiss food corporation until they quit Croydon five years ago. It has been vacant since, though it does have planning permission for conversion from office use to residential.
And it is in the planning permission that the Chinese company will hope to find its value from the deal, as they have acquired properties with permission for more than 1,000 units: 288 in the former Nestlé offices and around 800 units at St George’s Walk.
That all adds up to an estimated development value of £500million, according to Property Week.
The location has been something of a blight on the town centre for more than a decade, with previous development schemes, including the building of a John Lewis store, having all failed.
St George’s Walk: has suffered from developer blight for more than a decade
The pub and night club at the foot of the tower, which became the Blue Orchid, has been empty since 2004, and most of the businesses operating out of St George’s Walk for the past decade have done so on a low-rent, short-lease basis, giving the area a run-down feel that is regarded by some as a no-go zone after dark.
Today, Property Week quoted a Minerva spokesperson as saying: “Having spent the last couple of years investing in the overall Queen’s Square site, we now believe this is the right time for another party to deliver this vitally important project for Croydon.” Translated: having land-banked the properties for two years, they set up a bidding war and have pocketed a nice little earner.
“The St George’s House planning permission has been implemented, existing Section 106 Agreement revised and a masterplan has been prepared and discussed with Croydon Council,” Minerva said.
“It will now be for R&F Properties to consider the most appropriate way to bring the scheme forward.”
The Croydon deal has been announced despite the Beijing government recently announcing tighter controls on currency leaving China.
In announcing the purchase, Xia Ning, for R&F Properties, said: “As a newcomer to the UK market, we are excited to bring our expertise and enthusiasm to this significant town centre scheme.
“We aspire to provide positive real estate schemes across the world and look forward to working closely with the local community, businesses and stakeholders, to deliver the most appropriate scheme for the benefit of the borough.”
Which would be a first.
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Oh, goody….more flats! At least this time they are not promising the imminent arrival of John Lewis.
This story does require a bit more detail since redevelopment did commence on the Nestlé Tower to convert into flats, but was promptly halted after some investment was made by the developer. There were rumours of asbestos use in the original construction and problems about estimating the price of conversion.
“It will now be for R&F Properties to consider the most appropriate way to bring the scheme forward.” This would have been at one time the top development site for Croydon, but the decades of planning blight are moving the attractive development sites closer to East Croydon station. Bloomberg are reporting that property prices are now falling in London. It looks like Minerva are the winners, but have a feeling they are more desperate for cash flow than the Chinese who need to park their foreign money in a not very liquid asset that cannot be transferred very quickly.
With London now coming off the boil for developers it seems unlikely that this site will see any development for the next decade. This culmination of the Barwell plan for Croydon is now starting to lead the Central Croydon district into terminal and not relative decline.
I am delighted that at last we may see the decrepit St George’s Walk area redeveloped, but I would like to get the chance to meet the developers along with other members of the public, before they start designing the project, which I would love to see rip out the actual so-called Walk and replace it with a mini park, as the centrepiece to the renewed area.
I do hope that the Chinese will want to start their Croydon venture by treating the public with respect.
A good developer I met some years ago said that over-development of a site is actually something that many developers don’t really want to do, but in London, it is the clients who decide the price of the sites, which dictates the amount of development necessary to cover the land price the developer has to pay. If clients are greedy, and want absolute maximum cash for a site, the developer has to cram the site to turn a profit. He called it “The sharp shilling”. Cash now– consequences later.
The result is not Town Planning, but Town Cramming.
The results can prove disappointing or damaging, and come back to bite the client or, in reality, the public who placed trust in the politicians to make the right decision.
One of the direct current consequences of town cramming in London means building more buildings, taller, with a negative effect at ground level, as the sunlight that we all need for our physical and mental welfare is banished by canyon-like cliffs of buildings rearing up from the sides of the streets, rather like New York. Hence the only place to bask in the sunshine now is the park, or the river Thames, or a street that happens to let the sunlight in at the time of day one happens to be there.
Gaps between buildings–as proposed by the developers of Croydon’s Taberner House and Queens Gardens redevelopment– do let light in at ground level, but the amount, adequacy, and duration through the year, is the key detailed question.
I hope this really works, although in my opinion the site should not be expected to take 4 big towers, but only 3, as 4 must reduce the daylight reaching Queen’s Gardens. The current proposals for 4 are in my opinion, far more sensitive than the previous proposals which took 50% of the park and built on it, but even so, 4 is one block too many. Too much light will be blocked by the block facing the Council officers-that Inside Croydon calls Fisher’s Folly.
Daylight is important –especially to a park. If you go to City Hall, and stroll through Potters Fields, until a year ago you would have enjoyed a huge amount of sunshine, even in Winter, but the recently-built luxury blocks of flats between City Hall and Tower bridge now sadly blot out all sunshine to a huge area of park, for the whole of the Winter, and much of the Spring and Autumn, The park users can’t sit in the shadows cast by the new blocks– it is cold, cold, cold, and dark, dark, dark. The grass too, is now struggling for light.
The park users are now confined to the section by the Thames–they are crammed into the remaining sunny areas. They look like lemmings gathering to throw themselves over into the Thames.
Sunlight is important.
I think this is great news for Croydon. Lets hope they get cracking with it.
I most certainly however will make sure my own developments are built and sold well in advance as it looks like we shall have a massive supply of flats in Croydon within the next few years.
Good news for buyers.
I wish David Hamilton all the best with his developments. I think he only missed on thing in his comment: “..a massive supply of flats”..?? I am sure he meant to say :”…a massive oversupply of flats”.
St George’s Walk has been blighted much longer than a decade, more like 25 years plus!