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On Property
in CannesLondon is wedged between Paris and Krasnodar. Paris is twice as big as London. But Krasnodar is as bigger then both of them. Krasnodar is a region of Russia. So their tent at the Mipim property show in Cannes, which ends today, has to be a lot bigger than the marquees of two mere City states.
But Londoners will be more interested in what is going on in London than Paris or a part of the Russian Federation, even though this includes both Alexander Solzhenitsyn's island of exile, Sakhalin, and the Chechen capital Grozny which, for very unfortunate reasons, has many development opportunities.
Boris popped down to Cannes on Monday afternoon and popped back home on Tuesday. During a whirlwind tour of the exhibition which attracted 18,000 visitors from all over the world, the Mayor of London banged the drum hard for all the major developments planned for the capital and cheered up all who met him.
“Investors are simply spoiled for choice for the range of opportunities we are offering,” said the Mayor. Indeed: a wander round the London tent showed this to be true, except there are few investors eager to take on those opportunities just now. One sign of that was an absence of new schemes.
Instead there are plenty of ideas planted in less well-off boroughs for large-scale redevelopments. Most of these ideas are not actually new. It can take 20 years from inception for huge sites like King's Cross even to get onto site. So, you have got to keep pushing. Cannes is a lovely place to push. What is being pushed?
Nine Elms is the relative newcomer. The 2017 US embassy relocation and plans to rebuild New Covent Garden have perked up interest. This summer Transport for London is due to release details of how a £500 million Tube extension could be built into Battersea Power station, throwing that long-stalled development a lifeline.
Croydon is the historic home of sub-prime architecture but the capital of south London put on a good show in Cannes, pinning up not one, not two, but five master plans on the wall of the tent for better-looking bricks and mortar — one day.
Ealing came along to boast about the boost five new Crossrail stations will bring: so probably the top tip as the place for buying a new house. Hammersmith and Fulham turned up to reassure their full backing for a huge new development around Earls Court. This enthusiasm is not entirely shared by the several thousand council tenants who live on the wrong side of the underground tracks on the site. But, well, they'll come round in time.
Finally, let's not forget Stratford and the Olympic effect. Boris managed to steal the Government's thunder by confirming reports of a horribly complicated deal so that the taxpayer gets 85% of the first £650 million in profits from developing 10,000 new homes on spare land around the Olympic Stadium. The Greater London Authority only gets 15% of the next £1.3 billion — if that ever happens. Never mind, the show's the thing — and so is the looming election: one up to Boris.
… but Brent is due a revival
Brent is to get a new town hall. This week the council granted itself planning permission to build a new civic centre right next door to the entrance of Wembley stadium.
The nine-storey building for 2000 staff due to open in mid-2013 has been designed by a very posh firm of designers called Hopkins Architects, founded in 1976 by Sir Michael Hopkins, a patrician character whose main claim to fame in London is the MP's office block opposite Parliament.
To date the practice has specialised in graceful buildings for academia. But partner Michael Taylor was lunching developers in Cannes this week with a view, it seemed, to branching out into designing better-looking new homes than those put up by volume house builders. Well, there would be no better place to start than Brent.
From the Den to luxury pads as Caan eyes another earner
James Caan was in rich company at Mipim. The Dragons' Den star was sitting shoeless on a spotless 33-metre yacht called Lionchase, captained by Sir Philip Green's stepson Brett Palos.
Also on board was Anthony Lyons, who made a fortune buying and selling Earls Court. He and Palos look set to make a few more bob from the buying and selling of the O2 shopping centre on the Finchley Road. The pair paid £92 million last March: now Land Securities wants to pay them £120 million.
Caan now wants to make more than a few bob from property, hence his appearance at Mipim.
Last September the 49-year-old, who made his fortune in the recruitment market, announced he was going to put 10% of his cash into a commercial property fund.
He is not finding it that easy. “We have not been able to deploy the money because prices today are not sensible. We are waiting for the banks to release stock,” he said.
That may take a while. The problems are huge. One property agent reported from Cannes that Europe has a €200 billion (£180 billion) commercial property debt headache to cure.
Meanwhile Caan thinks there is money to be made in the residential market, through his holding company Hamilton Bradshaw. He already has a business called Look4Homes that gives interest-free loans of up to around £7,000 to help buyers pay the costs of moving. Interest free, you ask? I'm out. Look again; there are plenty of independent financial advisers apparently willing to give over a slice of their fees to Caan in order to get the lucrative mortgage business.
“We are getting hundreds of enquiries every day,” maintains Caan, who is also turning his hand to building posh flats in central London along with another man on the boat, Kam Babaee.
Babaee has his own small development company, K10. But from this week he will also be managing director of Hamilton Bradshaw Real Estate, which is looking to the rich for money to invest in developing flats “within a five-minute cab ride of Knightsbridge”.
It may soon start to happen, feels Caan. “We have an offer in on one £25 million block in Mayfair. This will be our first transaction.”
Bull run needs breather as pre-poll jitters take hold
The sun shone from Tuesday to Thursday in Cannes. The several thousand UK surveyors, developers, lawyers, bankers and fund managers in Cannes seemed to have a pretty good time.
But there was one cloud on the horizon: has the six-month bull run ended in Britain?
After a catastrophic 44% fall in values between mid-2007 and mid-2009, the price of office blocks and shopping centres began to rise last October. As late as last month predictions of a 44% rise in London prices were being made. But it seems a looming election and fears that the Conservatives or Labour are hiding something nasty in the woodshed is starting to affect confidence.
“Who knows what is going to happen,” said one leading property agent in Cannes. “But prices have stopped rising. So, why not just take a breather and see what surprises Cameron or Brown have in store.”
