Crosstree nurtures £600m scheme

Ernesto Bertarelli-backed Crosstree is in advanced talks to buy the 52,000 sq ft 44-48 Dover Street, W1, from Royal London Asset Management for £84m – a 3% initial yield – equating to £1,615 per sq ft.

The block is next to the 186,000 sq ft hotel and office complex 1-3 Berkeley Street, W1, which Crosstree bought from Aviva Investors in December 2011 for around £150m, equivalent to £830 per sq ft.

With the completion of a deal on Dover Street, Crosstree would unlock a one-acre site with the potential for a 300,000 sq ft scheme.

Current tenants at Dover Street include Lord Rothschild’s asset management company Renshaw Bay. But it is expected to become vacant between 2019 and 2022 as leases expire.

One West End agent said: “If Crosstree gets planning to increase the density of the site, the marriage value of combining the properties could create a scheme where at least £2,000 per sq ft can be achieved.”

Crosstree has been trying to buy West End stock over the past 12 months. It was one of the underbidders in the £165m sale of 90 Long Acre, WC2.

However, it has faced increased competition in the face of dwindling supply.

Crosstree was set up in August 2011 with £500m backing from Swiss-Italian pharmaceuticals billionaire Bertarelli. The firm was founded by Nick Lyle, former head of Blackstone’s UK business, and Sean Arnold, who led Starwood’s European operations.

The Bertarelli family was ranked number two in Estates Gazette’s 2012 Rich List, with a fortune of £7.4bn.

CBRE is acting for Crosstree; Strutt & Parker is representing RLAM.