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John Caudwell, the entrepreneur and founder of Phones 4U, is set to pay Ireland’s National Asset Management Agency close to £150m for the UK’s most valuable car park.
The deal, which ends years of speculation over who would buy one of Nama’s most coveted assets, is expected to close at the end of this month and is likely to result in the Mayfair site being rebuilt as an upmarket residential development. Nama is the “bad bank” set up to take over Ireland’s toxic property loans.
The Audley Square site, which includes six surrounding properties, has planning permission for a large but low-density 24-unit housing development, including a 19,000 square foot penthouse. However, the site is expected to be replanned to make it commercially viable.
According to people familiar with the process, Mr Caudwell, who sold his mobile phone empire for £1.46bn in 2006, plans to convert the Audley Square site into a large private residence. He is also expected to use some of the 160,000 square foot site to develop high-end apartments.
The £150m price tag would represent a value of under £1,000 per square foot, giving any developer scope to make large returns, with other residential schemes in the Mayfair area commanding prices of over £3,500 per square foot.
The 1960s car park has been the subject of regular speculation during the past two years, attracting interest from the Candy brothers, Grosvenor Estates and Middle Eastern and Asian buyers. The proceeds of the sale will be used to pay down the £125m owed to Nama by the syndicate of investors, headed by Derek Quinlan, the Irish financier, who bought the site in 2005.
“Nama has facilitated a timetable which has allowed for an orderly sale of the project, maximising returns to investors and it has resisted all of the initial lowball bids,” said one person close to the original investors.
The sale of the Audley Square site, which Nama has held since early 2010, comes as developers rush to cash in on the rampant demand for so-called “ultra-prime” property.
The demand is being underpinned by international buyers, who are increasingly turning to London residential property as an investment safe-haven. During the past 18 months, overseas investors have ploughed almost £6bn into the capital’s housing stock, according to Savills, the property group.
Mr Caudwell was unavailable for comment. Nama declined to comment.