Overview

Formerly part of London Metropolitan University, 41-71 Commercial Road was deemed surplus to requirements and LocatED was brought in to secure, manage and ultimately plot a suitable disposal strategy. With the commercial market underperforming, LocatED focused on the building’s pre-disposal possibilities. In addition to offsetting costs, the Asset Management team wanted to minimise the risk of adverse possession of this six-story building in central London. Innovative ‘meanwhile uses’ of the building, including use as a film set, the backdrop for music videos, office spaces and parking, generated revenue of £1.3m. On the commercial market, the building achieved in excess of £50m, delivering an excellent return on investment for the Department for Education.

Challenge

LocatED was commissioned to lead a disposal strategy seeking a new future for the site, leveraging its value while that path was planned and delivered. The commercial sales climate at the time was volatile, with commentators predicting a 19% decline in capital value. This presented a significant challenge for the building’s immediate disposal, but innovative ideas for its ‘meanwhile uses’ could deliver financial rewards.

Solution

Commercial Road was rented out as a filming location for tv and film productions, including This is Going to Hurt, Alex Rider, Killing Eve and Gangs of London, amongst others. It also featured as the backdrop for music videos and fashion photoshoots. Added to commercial office leases and parking arrangements, cost savings and revenues over a five-year period totalled £3m.

When marketing began for the site’s ultimate sale, Commercial Road attracted strong competition from the open market.

Impact

The successful buyer proposed redevelopment of the site as a 150,000 sq. ft. education and innovation hub. Their proposal retained the existing building with the potential for three additional floors at roof level for educational use – this development by the Higher Education sector protected the educational legacy of the building. Potential additional new student residential accommodation was also planned.

In August 2022, LocatED completed the unconditional deal, with the final price an uplift on the original purchase price and defying predictions. This was a triumph of teamwork, commercial acumen and leveraging the site’s worth as an asset at a time when its capital value was sub-par. Choosing a more optimum time to market the site delivered far better yields to be spent elsewhere within the Education Estate.