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On Monday week Prince Charles will be given an ironic cheer at a party to celebrate the completion of the superstructure of a huge new development adjacent to St Paul's Cathedral.
One New Change is that half-finished complex of offices and shops in Cheapside. Land Securities is the developer who defied the Royal Wish and said “No” to a request from Charles to reconsider the design.
A look round the 560,000 square foot scheme this week revealed why HRH had misgivings.
The £543 million development stands more than 50 metres tall and occupies a whole City block. It feels as though a Royal Caribbean cruise liner has docked in a space once occupied by the Royal Yacht Britannia.
But New Change has been designed by a very pricey French architect — Jean Nouvel. And neither has any expense been spared on the novel “stealth” cladding, designed, tricoloured and shaped, all in an attempt to minimise the impact on the eye.
Land Securities and the City are happy.
The former has let nearly 40% of the office space already to US law firm K&L Gates (that's right, Bill's dad's firm). The latter is happy because the block is quartered by public thoroughfares and contains a 220,000 square foot shopping centre. There will be a big M&S and a public roof terrace with spectacular views of St Paul's.
New Change opens in December next year. But it is one of only a handful of mega-developments under way in the City. Many sites lie dormant. Land Securities' Walkie-Talkie in Fenchurch Street remains a hole in the ground, as does British Land's Cheese-Grater in Leadenhall. Arab Investments is scraping around in the basement of their Pinnacle tower in Bishopsgate. But nobody believes work will start on the superstructure without a tenant signing up for most of the office space.
But, but, but… There is a feeling in the air that development in the City is creaking back into gear. A feeling reinforced by statistics put out this week by Cushman & Wakefield. The property agents say not one substantial commercial development began in London in the three months to September — and that occupiers are starting to “jostle for space” in those half-built.
This prompts the question unanswered by C&W; when will development start up again in the City? Fairly soon, feels John Burns, chief executive of Derwent London, a £1.8 billion property company that specialises in medium-sized development in the capital. “It is far higher up the agenda now. We don't want to be left flat-footed. We should be looking to deliver space by the end of 2011.”
But Burns echoes the view of many that there is no appetite yet to risk starting the mega-schemes. “These can't start until they get a pre-let.” That is because banks have not recovered their nerve enough to make mega-advances. There are also still worries about a double dip in the economy.
But these fears aside, it feels like the next development cycle is about to begin. Not news that will especially please Prince Charles.
Veterans snap up chance at Arsenal but extra time is on
Property's two Premier League strikers, Raymond Mould, 68, and Patrick Vaughan, 62, were given one of those lifetime achievement awards by Estates Gazette at the Grosvenor House on Tuesday.
You know, the sort of prize that tells you the game is over.
Not for this pair; on Monday they made Arsenal look flat-footed with a £41.4 million purchase of 146 homes that the club has built on the site of the old Highbury Stadium.
A wander round this rather handsome development on Monday showed roughly half the 655 flats appeared to be occupied; no people, but plenty of curtained windows.
This is a big improvement on a viewing seven months ago, when there was barely a drape to be seen.
In March, Arsenal chairman Peter Hill-Wood admitted the prospect of £70 million-£100 million in profits had gone, thanks to plunging prices, and any surplus would “now be a bonus”. Hill-Wood did dispel rumours that buyers who had put down deposits in 2006-07 were walking away. The chairman said drop-outs were “in single figures”.
But one single depositor who has dropped out put between 10% and 15% down on no fewer than 146 flats: yes, the ones now bought by Mould and Vaughan's AIM-listed company, London & Stamford.
L&S paid an average of £284,000 for the one and two-bed units compared with asking prices from £345,000 upwards. Mould says it works out at £375 per square foot – and just one day later someone offered to buy a unit at £600 a square foot. So, current owners need not completely panic.
But the game is not over yet. Arsenal has permission to build 755 more flats on a site just south of the Emirates Stadium. Will the unlucky club bring in a property player who knows the game this time around?
All a bit fishy down at Quays
Developers of the £1.5 billion Silvertown Quays scheme were given notice to quit this week by the London Development Agency, which owns the empty 59 acres in the Royal Docks, where there are plans to build 5000 homes, shops, a hotel and, er, an £80 million aquarium.
The fish-filled dream actually died last summer. That was when a consortium led by former English Partnerships chief David Taylor and Japanese builder Kajima failed to get a promised loan from Bank of Scotland. So, what now? First, the recriminations; lots of very fed-up people have lost lots of money.
Then resurrection: A new consortium will be found. That crazy fish tank the size of five football fields will go, to be replaced by more homes or shops. And who might join that consortium to build the homes? Barratt perhaps? After all, they have been building just across the road.
Tesco feather in Robin's cap
Former City golden girl Robin Saunders is linked to a deal announced this week that will see Tesco sell and then lease back £400 million of its stores to a fund called Index Linked Properties.
Saunders, 46, is the photogenic American who did some very clever deals at WestLB bank before exiting in 2003 after a £750 million capital-raising exercise for TV rental company Boxclever turned sour. She now runs Clearbrook Capital out of Grosvenor Street. Last summer, she announced via an interview in Vogue that the firm had a few billion to spend. Now perhaps some of it at least will go into Tesco's till. For Clearbrook is to jointly manage the £1 billion Index Linked Property fund.
There are dozens of start-up property funds, many given to empty boasting of £1 billion of “firepower”. But few have come up with the sensible idea of only investing in shops and offices where the tenant has signed a long lease with rent increases linked to the cost of living. Even fewer have bagged £400 million of very safe stock.
