Target: Battersea Investment (SW8)

Battersea Freehold Period House with conversion potential and a motivated seller

  • 1,207 sqft freehold period house in Battersea

    Period freehold house with expansion potential into the roof area
    Period freehold house with roof expansion potential
  • 3 bedrooms / 2 reception rooms / 2 bathrooms, across 2 floors. The roof contains plenty of space to expand into. With strong precedents up and down the street, this remains one of the last properties offering this potential value add and space creation
  • Close to Nine Elms / Battersea power station and general regeneration area. Will be less than 0.5 miles from the new Northern line Battersea Park station set to open in the coming 3-4 years
  • 0.2 miles to the renowned Battersea Park, 0.1 miles to Queenstown Road station and 0.2 miles to Battersea Park station
  • Marketed price: £775k (down from £800k). Target a £725k (equivalent to a highly competitive£601psqft). If required, negotiate up to a maximum of £750k (equivalent to a competitive £620psqft)

Investment Strategy

  • battersea-floorplanDay 1 price arbitrage given motivated vendor and current condition of the overall property needing at the very least a light refurb. Assumed £725k / £601psqft for acquisition and assumed capex for new staircase, council approvals and roof conversion works to create a new bedroom and bathroom on the 2nd floor
  • Strong interim rental available via single AST or licensed HMO route generating 7.15% gross yield; latter HMO route expected to yield a starting £720pm rental per room across 6 rooms once the roof conversion has taken place
  • Sale in 2 years at conservative £1mn (£622/sqft – almost the same as the acquisition price!) accounting for greater internal space through roof conversion and based on current market value and forecast capital appreciation in this area. No reversionary capex assumed to a family home given assumption of strong demand due to the competitive gross yield rental achieved through 6 bedrooms for single professional sharers
  • Potential refinancing in interim to further boost IRR possible based on rental value but not assumed as part of this analysis yielding 30.5% IRR and 1.78x cash multiple.

    Financial Analysis:

    battersea financials

Click here for a link to this property

Note: There is a somewhat interesting dancing pole in one of the bedrooms. LPA would suggest that you take this out (given we are confident it is not a structural fixture!)

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