Patient clients allow Morgan Capital to play a longer investment game

Morgan Capital bought 8-10 Hanover Street for one of its clients, an overseas private investor. The price paid wasn’t disclosed, but it was marketed at £25m. Occupier demand for West End space is still buoyant and buying opportunities are scarce; this investment was hotly contested. The property is a development proposition; it has consent for 25,000 sq ft of offices, 1,636 sq ft of retail and six upmarket apartments. Morgan Capital will manage the project.

The boutique firm, which specialises in central London investment advice and  asset management, has bought two other buildings for their client, one in the West End and one in the City. “In our experience, with high net worth investors you have that degree of flexibility on the exit scenario, which allows you to look at the property without having to panic about how to sell the building in such and such a year,” says partner Alex Morgan. “You’re able to take that slightly longer-term view on the quality of an area, the quality of a building, the quality of product. That ultimately allows you to make a better decision about the asset that you buy.”

Funds, Morgan says, will be looking to exit an investment within the life of the fund, which can mean deals that would be otherwise good may not stack up for them. “High net worth investors haven’t taken on other people’s money promising an 8% internal rate of return. They take a view on what return they want to receive from that particular asset,” Morgan notes. He predicts big changes in Hanover Street. “Crossrail is six or seven years away, but will have a transformational change on Hanover Square and the immediate vicinity,” he says. There are also other projects planned nearby. “You can look at Hanover Street in a very different light than if you had to build it and be out of it in three to four years. It will feed off everything else going on in the vicinity, which will create footfall and will hopefully increase the value of the retail element.”