Somerset Estates REIT PLC are delighted to announce that we have completed on the purchase of 70 Grosvenor Place, Margate. 70 Grosvenor Place is a block of four two-bed flats; three of which are currently let out on ASTs. The fourth is in need of refurbishment which will be carried out in the next few weeks.
The property is located in Margate; very close to the centre of the town, the train station and the recently reopened Dreamland amusement park. Over the past few years Margate has experienced a massive upswing in fortunes.
The purchase price is £360,000 (Three Hundred and Sixty Thousand Pounds). This works out as £90,000 per flat. We believe that this is a significant reduction on the true market-value.
Over the past 12 months 237 flats (average of 1.8 bedrooms) sold in Margate, the average price was £139,052.
That is £49,052 more than Somerset Estate REIT have paid per flat.
Therefore, we are purchasing the property at nearly £200,000 below the market value.
Three of the four flats are currently rented at £525 per month each. Again, we believe that these flats are rented at below market-value rates. Currently, the average asking rent in Margate for two bed flats is £650 per month. Therefore, we believe we can increase the income from £25,200 to £31,200 per year - representing a 24% increase, and a significant ROI for our shareholders.
This purchase could simply be put down as “being in the right place at the right time”, however, I believe it is more to do with the strategy we have put in place, the contacts we have made, and the market knowledge that helps us identify when a property is worth buying.
Why Margate (or ‘Shoreditch-on-Sea’)?
According to Rightmove, average house prices in Margate have increased from £132,883 in February 2013 to £222,493 in February 2018. That’s a 67% increase in just five years. What has lead to this huge price growth?
- Council Investment
Margate was once, one of the most popular holiday destinations in the UK. However, cheap package holidays abroad led to a decline in fortunes for the town. This led to many of the former hotels and B&Bs being converted to low-quality,cheap flats. Thanet District Council realised that something needed to be done, which is why they set up “Live Margate” (https://www.thanet.gov.uk/info-pages/live-margate-project/) with a £23.1million investment to transform the area into a great place to live, work and visit.
2. Cultural Led Regeneration
Designed by Stirling Prize winning architects David Chipperfield, Turner Contemporary, has spearheaded the cultural regeneration of Margate.
The gallery has already seen well over one million visitors through its doors since it opened in April 2011, and has been a catalyst for further creative activity in the town. The gallery celebrates the town's association with JMW Turner, one of Britain's best loved artists, and presents the best of contemporary art practice.
Margate Old Town
Margate Old Town has been transformed in recent years, on the back of £4 million worth of public and private investment. This investment has led to a unique collection of niche boutique shops, galleries and places to eat and drink (my personal favourite is The Ambrette!).
Originally opened in 1880, Dreamland is one of the original amusement parks in the UK. In 1920 the oldest roller coaster in the UK - , a Grade II Listed scenic wooden railway -opened for the first time.
As with the rest of Margate, Dreamland started to fall into decline with the rise of the cheap package holiday. In 2003, the park finally closed. However, in 2013 a compulsory purchase order from Thanet District Council led to a multi-million pound restoration funded by the Heritage Lottery Fund, the Government’s Sea Change programme and Thanet District Council. The park finally opened for the 2017 summer season.
3. Transport Links
The journey time from London’s St Pancras International station to Margate currently stands at 88 minutes. Proposals to enhance the Ashford to Margate line with reduce the train journey time from Thanet to Central London to just 60 minutes.
This will provide accessibility to the capital, making it an attractive proposition for both businesses and commuters.
The future for Margate is looking sunny with price rises expected to continue, albeit at a slower pace.
To learn more about our strategy please get in touch. https://somersetestatesreit.co.uk/contact-us