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The view from the top of the 147-metre Strata residential tower at Elephant and Castle is spectacular. Give it three months and the view of the top of 43-storey building will also be pretty spectacular.
By the end of January developer Brookfield will have hoisted into place three five-bladed fans, each nine metres in diameter, all whirling round for the world to see.
The turbines will generate enough power to light the common areas outside the 408 flats from next April. The pre-sale of the 310 private flats in the first half of 2007 at prices averaging £615 per square foot should generate a decent profit for the Canadian developer.
Providing Brookfield can get the mortgage lenders to agree that a one-bed flat in the block is worth £280,000 and a two-bedder £440,000, then the £114 million cost will be comfortably covered with a near-20% margin.
But Brookfield wants more than a decent margin. “We are looking to dominate high-rise development,” says Ashley Muldoon, a super-smart Australian, who is managing director of Brookfield Construction and also in charge of the £590 million contract to build London's tallest tower, The Pinnacle in Bishopsgate.
Brookfield wants to be more than a builder in the UK. “We are looking to buy assets and get into development,” says Muldoon. “We want to bring construction and development under one roof.” Well, he's got the backing. The 14,000-strong global business manages $80 billion (£49 billion) of property and energy assets around the globe. Last year it made a profit of $649 million on revenues close to $13 billion.
Brookfield owns a stake in Canary Wharf. But the big impact on the UK fortunes of this rather faceless group was the takeover of Australian builder Multiplex in June 2007 for A$4.2 billion (£2.3 billion).
That brought in the Strata development and a half share in the £4 billion Cricklewood development. It also brought in a bunch of highly capable Australians like Muldoon and the team building the Strata tower.
In August Brookfield said it was putting together a $4 billion fund to invest in distressed commercial property globally. Right. So, that's lots of money and good guys who can build things. Guess who is looking for that combination: RBS and Lloyds. The two banks have spent the past three months trying to persuade every solvent and respectable UK developer to take over stalled or half-built developments.
“You finish them and we'll share the profits,” is the promise. A stalled shopping centre in Yorkshire has just been sold to a consortium backed by US fund Area Partners for £100 million. How about giving the Canadians a go?
Post-Raymond, it's time for Soho Estates to strike out
The “King of Soho” is dead; long live his estate.
That can safely be assumed from reading the report and accounts of Soho Estates published last week, 20 months after founder Paul Raymond died, aged 82.
It can also be safely assumed that Raymond's nephew, Mark Quinn, who runs the business, is aware that the gently mouldering acres around Dean Street and Wardour Street have huge development potential.
He could afford to wait. The first independent valuation for six years saw a 20% increase in the value of the estate to £357 million. Income from rents rose 8% to £26 million. The Leicester Square-based office has only 20 employees and costs little to run. So a healthy £16 million profit for the Trustees was made.
They include Raymond's granddaughters, Fawn James, 23, and her sister, India Rose, who is five years younger. The older sister is now on the board of the business whose directors awarded themselves a £4 million bonus in 2008. Grandpa was famously frugal, so the £4 million payout won't have been his dying wish.
Raymond, who lived in a penthouse flat behind The Ritz, would also have been fed up to discover someone had broken his rule of sticking close to home by investing outside the West End. In fact someone put £4 million into a 90%-owned venture in the United Arab Emirates. Soho Estates has had to make a £1.4 million provision against that loan.
Perhaps this minor misadventure will concentrate minds on improving the home turf. Quinn is said to be turning his mind towards the identification of some major development sites across the Soho estate. But the process is apparently still at an early stage. That was the message last year as well.
Come on guys, the King really has gone you know.
* The transformation of Fitzrovia began quietly enough last week with a reception on Thursday evening in a shop in Whitfield Street.
The shop belongs to Derwent London, a £2 billion property company which owns 30 buildings grouped around the junction of Whitfield and Howland Streets, just up from the Charlotte Street restaurant strip.
Members of Fitzrovia and Bloomsbury society were invited, along with a few of the tenants of the one-million square feet owned by Derwent.
This group was given a gentle introduction to the proved talents of the company and provided with a brochure containing details of how a developer who supports decent architecture is going to improve the area.
Now decently famous local architect Ken Shuttleworth of Make is to produce a master plan of the area which includes the UK HQ of Saatchi & Saatchi, whose lease on the 200,000-or-so square feet of space they occupy runs out in 2013.
That's not long in the eyes of Derwent, who have clearly got their eyes on a major redevelopment of the Saatchi site and the surrounding buildings.
