Tag Archives: property

Fiddling with the ingredients at Battersea Power Station

When I interviewed Rob Tincknell, chief executive of the Battersea Power Station development, for my book Up In Smoke, he went to great lengths to explain why the plan would be a success, not just as a business but as a new piece of city.

Well, he actually used the words “urban village”, but let’s try not to blame him for that.

elephants

Tincknell enthused about how carefully they had worked out the exact mix of residential-commercial-leisure space in a way that would create the perfect “place” – a real destination that people wanted to visit. This was the social science of “placemaking” and the developer had published numerous reports and beautiful but boring books to explain their position.

He proudly told me the precise numbers: “57% residential. Of the remaining 43% that’s about 3.4m sq ft, 1.2m retail and restaurants, 1.7m sq ft of offices and the balance  in hotels, leisure and community space.”

These numbers, he insisted, were sacrosanct – they were the recipe that made the cake rise.

“It’s an appropriate density for the centre of the city,” he said when I questioned the scale of the residential aspect. “This level of density has been proved all round the world as a density that works. It creates a critical mass so the shops function, the public transport works, there’s a buzz and that’s what people come for. You create this mix of uses, this cocktail that you really believe in, you have to stick with it, you can’t fiddle with the ingredients.”

Guess what?

That’s right, the ingredients are now being fiddled with. According to an interview with Ticknell in the Financial Times,  the bottom has fallen out of the luxury flat market, causing problems for the power station model. But riding to the rescue are Apple, whose decision to move into the power station’s vast office space in 2021 has undoubtedly been a gigantic coup for the developers. Now, with Apple proving such an attractive hook, Tincknell is talking about turning over more of the residential aspect to offices. He told the FT that at least one planned building in the third phase of the scheme, designed by Frank Gehry and Foster + Partners, was under consideration for a change of use.

“I could easily see us adding another million square feet [of offices],” Tincknell says. “The great thing about a long-term scheme like this is we can adjust with the markets. If there’s no residential market and a very strong office market then we will build offices.”

It looks as if that perfect cocktail is being shaken not stirred.

For Up In Smoke, Tincknell promised me “that we are genuinely committed to creating a brilliant community. We feel very passionate. It will only make the place better. We have a responsibility to London. We are doing things way beyond the remit of the site so it fits in with London and genuinely improve the quality of life. If we succeed in that goal the value of the commercial and residential assets will rise and it will be a great place to live and visit. You can’t just develop it and run away, it has to work.”

On that latter promise, we’ll just have to wait and see.

 

 

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Earls Court and the death of fun in London

“In London, it seems everything that’s not a shop, offices or luxury apartments is being demolished,” sighed artist Duggie Fields when I interviewed him last month for a piece in Uncut about the imminent demolition of Earls Court Exhibition Centre. It’s a quote that, in a nutshell, seems to encapsulate all that is going wrong with London right now.

“There is so much damaged being done to London all over, Earl’s Court is just part of it,” says Fields. “London is losing a scale of living that has been very special for a long time. Now we have this mini high rises that could be from anywhere, they are characterless and there are so many of them.”

Earls Court will be pulled down early next year and replaced by houses, ending the area’s 120-year history as a place of fun. This history is well known to London nerds, but is worth repeating. The former cabbage field of Earls Court was transformed into a funzone by Yorkhire entrepreneur John Whitely at the end of the 1880s, when he brought Buffalo Bill’s Wild West Show to the newly transformed exhibition site, hemmed in between railway lines. It featured a miniature Rocky Mountains, Native American village, corrals and a cowboy bunkhouse. “The show was a revelation,” write Felix Barker and Peter Jackson in Pleasures Of London. A few years later, the site attracted London’s first big wheel – a 300ft monster called the Gigantic Wheel.

When that lost its thrill, new entertainments were sought – including plans for a mechanical racecourse. Numerous exhibitions were also held there – including Captain Boynton’s Water Show in 1893, the Greater Britain Exhibition, in 1899 and Shakespeare’s England in 1912. Then in 1937 the Exhibition Centre was built. It opened with a Chocolate and Confectionery Exhibition and went on hold swimming galas, motor shows, the Royal Tournament and events for the 1948 and 2012 Olympics.  It’s a decent looking building, too, well worth saving for its lovely Art Deco curve and revolutionary concrete engineering. So many magnificent buildings from this era are being lost.

Less, pleasantly, in 1939 it hosted a gargantuan meeting of Oswald Mosley’s fascist blackshirts.

From the 1970s, Earls Court also began to host pop shows. David Bowie was first to play there, although Noddy Holder of Slade claims they were the first to book it and then managed to improve the sound after Bowie flopped. Concerts by Bob Dylan, Led Zeppelin, Queen, Rolling Stones and Pink Floyd followed. I saw Oasis there, unfortunately, and also the BRIT awards in 2000, when I threw a champagne cork at Christine Hamilton.

Slade fans at Earls Court

And now it’s to come down, replaced by 8,000 houses and some shops.

Duggie Fields has lived in Earls Court since the 1960s. You may recognise his flat – and former flatmate.

He points out that the removal of the Exhibition Centre will, at a stroke, remove any point or purpose to the Earls Court area. “It has nothing for people to come to,” he says. “Just boring anonymous shops and lots of traffic. All we’ll get is more chainstores because there’s no neighbourhood, there’s no locals. You can’t create villages, they grow over a long period of time.” He also fears for the pubs and restaurants that rely on the Exhibition Centre, which has still been functioning almost round the clock despite impending doom, for their custom.

He’s right. Earls Court is, even with the Exhibition Centre, one of the most boring areas of London. Without it, it’s pretty much irrelevant. But there’s a problem here too. London needs housing, desperately. Surely these 8,000 or so units will help?

It seems unlikely. The new apartments will – like those in the big new developments and Nine Elms – be aimed at the pockets of investors and speculators, people with deep pockets who have taken advantage of stagnant interest rates to buy up property and then charge eye-watering rents for them. It’s hard to blame them, as economic policy seems designed purely to over inflate London’s property market, but the damage is considerable. Because not only are they building identikit apartments in areas nobody that actually needs housing can afford, they are in the process annihilating anything that could be seen as fun – pubmusic venues, sports grounds as well as historic structures like Earls Court. It’s a depressing, dismal outcome that offers the worst of all possible worlds.

It’s also entirely typical of the current state of London: could you possibly imagine a scheme as imaginative and as exciting and beneficial for the public as the conversion of Tate Modern happening today? Not a chance. It would be flattened and replaced by luxury glass apartments. What do we get instead? A bloody Garden Bridge, stupid cable car and shopping centres. Thank god at least the Olympic site has been safeguarded – for now.

“There’s nothing to build on the heritage they’re throwing away,” says Fields of Earls Court. “It’s been an exhibition site for over 100 years. London is tossing that out with as many other things as it can toss out under this current administration.”

Inside London’s super-prime houses

I wrote this article in 2011 for Gulf Life about London’s super-prime property market.

They call it super-prime. That’s the end of the London property market that starts at £15 million and goes as high as £150 million. It’s a market that operates in isolation from the rest of London and it’s one that is dominated by an international clientele, with buyers jetting in from the booming economies of the Far East, Russia and the Middle East. So what do they get for their bucks?

‘Buyers at this end of the market all have five demands,’ says Giles Hannah, who oversees the European operation of Christie’s Great Estates, the property branch of the venerable auction house, ‘security, space, parking, location and luxury features.’ Christie’s is currently selling a mansion on Cornwall Terrace, a dramatic John Nash-designed sweeping terrace overlooking Regent’s Park. It boasts six bedrooms, a home cinema, gym, steam room, study, state-of-the-art kitchen, mews house for staff, garage with blast-proof doors and majestic views of a royal park. Floors are covered by Italian marble, dark oak or silk carpet, there’s a chill room for furs and the walls are covered with paintings by Picasso and Damien Hirst on loan from the auction house. It’s yours for around £30 million.

‘This property was bought and developed in 2008,’ explains Hannah. ‘There are eight on the terrace and they are being released house by house into the market. London remains a key place to buy and although it’s been a difficult market since 2008, there are enough international buyers around. There are 1,100 billionaires in the world, all capable of purchasing a £30m house in any climate.’

The address they all want is Knightsbridge, which partly explains the prices fetched at One Hyde Park, a development by Christian and Nick Candy. One Hyde Park is a gleaming Richard Rogers-designed tower of luxury that sits almost above Knightsbridge tube, with Hyde Park on one side and Harvey Nichols on the other. A penthouse is said to have sold for more than £100 million and, according to Savills, the selling agent, 60 per cent of the 86 apartments have been snapped up.

A five-bedroom apartment costs upwards of £50m and takes up an entire floor – around 10,000 square feet. The hallway stretches the length of the flat from master bedroom to reception room, one end overlooking the park, the other Knightsbridge. To give an idea of the scale, a baby grand piano in the corner of the living room looks like a coffee table. Off the corridor are a further four bedrooms, two reception rooms, a TV room, study, dining room and two kitchens (one for staff). The building contains a squash court, 22-metre pool, games room, party room and meeting room.

‘You don’t need to leave the development,’ says Ned Baring, Associate Director of Savills. ‘You can live, work and play here. What makes this different to other complexes is that we have 50 dedicated staff at the Mandarin Hotel next door who can provide any service you need, from setting up a dinner party to doing your dry-cleaning. It’s like living in the best hotel in the world, but with your own private residences.’

The Candy brothers have invested a fortune in One Hyde Park – how much, nobody will say– banking on continued high demand for super-prime London property. ‘In the morning you can speak to Asia and in the afternoon you can speak to New York,’ says Baring. ‘There aren’t many cities where you can do that. You might not be here 365 days, but you need to be here.’

Hannah says much the same, ‘Your average Christie’s client will be ultra-high worth and may use this property just a couple of times a year. They’ll also have a place in the south of France, one in New York and a chalet in Courchevel.’

If the ostentation of One Hyde Park doesn’t appeal, a short stroll away – but crucially, still in Knightsbridge – you’ll find the discreet charm of Ovington Square, a classic London garden square located between South Kensington, and Chelsea. ‘This part of Knightsbridge is very popular with Middle Eastern buyers, especially from Qatar, Lebanon, Syria and the UAE,’ says Noel De Keyzer of Savills. ‘They like traditional houses, and will come in the summer to avoid the heat at home.’

The house, refurbished in 2008, was recently rented by a Lebanese family (another renter was Bill Gates), but is now on the market for just under £20 million. The selling point is the vast two-floor pre-war extension taking up the entire back garden, itself the size of a normal house. This holds the reception room and master bedroom. The five-bedroom house also has a sub-basement beneath the lower-ground-floor kitchen, containing a gym and steam room.

‘This end of the market stayed very strong in 2008,’ says De Keyzer. ‘But in 2009, it was dead. People weren’t buying. It picked up again in March 2010, helped by weak sterling.’ The problem now is one of supply. ‘There will be an acute shortage of properties in 2011,’ says De Keyzer. ‘A lot of vendors don’t think they’ll realise their expectation because the super-prime market is still 10 per cent below its peak in 2008. You are dealing with very affluent people who have no need to sell in an uncertain market, and if they’re selling to buy somewhere else, they have nowhere to go.’

There are, according to Hannah, only three developments ready for the super-prime market: Cornwall Terrace, One Hyde Park and The Lancasters. The latter is a fascinating project on the north side of Hyde Park in Bayswater. A regal Victorian terrace has been transformed. The old building behind the gorgeous Grade II-listed facade has been knocked down and replaced by an impressive new complex of 77 apartments, retaining the original front with its huge windows and exceptional views of Hyde Park.

‘These buildings were built in the same style and grandeur as Belgravia,’ says Mark Cherry of Minerva, joint developers with Northacre. ‘It was a high-profile wealthy area and is now going through a revival. Some people will only buy Mayfair and Knightsbridge, but others will want better lifestyle and better buildings, so they will come here. We’re offering a high-level of service for people that expect high service, with three concierges on site at all time. I spoke to somebody who was moving from a mansion block and they said they want to be in a building where the pipes don’t rattle and they don’t have to rely on a single elderly grumpy porter. People want classic British houses with American-style service.’

The surprising thing about all four properties is how similar they are. All are decorated in dark masculine colours. All have Gaggenau kitchens and Crestron systems to control sound, security and lighting. None have gardens. All have flat-screen TVs in the walls of every room. The houses have lifts – ‘Middle Eastern clients don’t like using the stairs,’ says Hannah – while the apartments encourage ‘lateral’ living. There are separate bedrooms and entrances for staff–at The Lancasters and One Hyde Park, some clients also purchase a separate apartment for staff. All have serious security, and all have space. Lots of space. The most breathtaking is One Hyde Park, the best views are from The Lancasters and Cornwall Terrace and the most charming is Ovington Square.

The properties can even be sold fully furnished. ‘The keyword is “turnkey”,’ says De Keyzer. ‘International clients are busy and want to move in straightaway with their suitcases.’ That’s not to say they’ll rush to make the purchase. ‘They’ll look at everything available,’ says Hannah. ‘They like to have choice. This isn’t a financial purchase, it’s a personal one.’

The super-prime market is very lucrative for estate agents. ‘It’s competitive, but in the £10 million-plus range Savills and Knight Frank have more than 50 % of the market between us,’ says De Keyzer. ‘That’s because we are international companies with very good contacts. Our fees are 2.5% for sole agency and 3% joint agency but it’s negotiable. We can afford low fees because our values are higher and we have a large turnover of properties. In London the average house is sold every five years, but on the continent people hold on to property for generations.’

That could be about to change. ‘Over the last few years, the lack of property has become apparent,’ says Hannah. ‘The best properties have been bought by international clients and they won’t be traded for many years. People who purchase a premier address will keep it as an asset for a while.’

Because of this, Hannah anticipates good times lie ahead. ‘London is London, arguably the centre of the world and a major financial hub,’ he says. ‘Clients need to be here, they want to be here, they understand the tax implications and they have good accountants. We’re expecting 30% growth over the next three years.’

Cherry agrees. ‘The market at this level is strengthening. Because people want certain key locations, the market can never be saturated, there are listings, conservation areas, it takes ages to get planning permissions and there are strict limits on tall buildings – it’s a very good market to be in.’ If you can afford it, obviously.

Inside London’s super-rich bubble

Peter Mandleson once famously said that ‘we are intensely relaxed about the filthy rich’, a sentence that has always made me intensely uncomfortable until very recently, when I spent some time exploring the various ways the filthy rich spend their filthy money. What really surprised me, though, isn’t what they spend, but the way they spend it. It isn’t greed so much as purchasing for sheer pleasure on a scale that most of us can barely imagine and that they themselves will hardly even notice.

It began at Christie’s auction house for a piece I wrote for the Independent on Sunday that went behind the scenes before this week’s big impressionist/modern evening sale. The collectors who will be bidding on paintings by Monet, Picasso and Degas are taken from the ranks of the world’s super rich, and will between them spend around £100m on new paintings for the walls of their second and third homes.

Then I went to see some of those second and third homes when I wrote a piece for Gulf Life magazine about London’s super-prime property market – that’s anything from £15 million up to about £150 million. I visited four apartments and houses in Knightsbridge, Bayswater and Regent’s Park – including the Candy Brothers extraordinary One Hyde Park development – that between them had a combined value around £121 million and contained more marble and flat-screen TVs then is good for anybody.

Finally, last week the owner of my favourite football club – who many believed to be losing interest in the sport – dropped in to spend a trifling £70m in one day on two players, just like that.

Now, while it is undeniable that the outlay of such vast sums of money on luxuries is morally indefensible and all the rest, it’s also increasingly apparent that as there is absolutely nothing you can do about it, there’s no point in being anything other than intensely relaxed about it. The alternative would drive you mad.

These people are worth billions, and for them £150m is an irrelevance. To understand exactly why, try this thought experiment, taken from John Lanchester’s outstanding ‘Whoops!’, about the global financial crisis, which shows in a fairly clear way the vast difference between millions of pounds and billions.  

Lanchester writes, ‘Without doing the calculation, guess how long a millions seconds is. Now try the same for a billion seconds. Ready? A million seconds is less than 12 days; a billion seconds is almost 32 years.’

Or as one estate agent told me, ‘When they spend £30 million on a property, it’s not a financial decision, it’s a personal one.’