“To invest in secondary property is a false economy.” Wise words from Paul Orchard-Lisle in a statement he made as chairman of Apache Capital Partners, the £120m property fund manger.
He should know. The former Territorial Army brigadier, now 75, bought a two-storey house in super-prime Mount Row in Mayfair in 1999, the year his highly successful rule of Healey & Baker ended after 11 years as senior partner.
Last weekend, 30 Mount Row was splashed all over the papers. The pink-washed 2,000 sq ft house is on the market for £35m, complete with permission to tear it up and build a 16,000 sq ft mansion instead.
Mayfair agent Peter Wetherell reckons the resultant residence, containing a double basement, five upper floors, plus guest villa at the bottom of the garden, will be worth £65m, or £4,000 per sq ft.
Deduct the £35m purchase price and £6m for reconstruction from the end value and a buyer could make a £24m profit. Well, at least that’s the theory. In practice it’s the seller who will be making £21m profit, before costs.
No, it’s not Orchard-Lisle. He sold in May 2008 for £13.6m, according to Land Registry documents. That was after getting permission for a three-storey refit. The property is now owned by Summerford.
The owners of the offshore Jersey company are believed to be Russian. Neither they, nor Orchard-Lisle, will need convincing that the real money lies in prime property, especially if you can expand the floorspace eightfold.
PS: There is a codicil to this tale. Orchard-Lisle and the unnamed buyer ended up £100,000 apart on the deal, he says. A gentleman’s agreement was reached: Orchard-Lisle – the very epitome of a gentleman – promised to donate the £100,000 to charity if the buyer agreed to pay the full £13.6m. A deal was struck. The main beneficiaries were the Royal British Legion and the Royal Artillery Museum.
Security, post-Westgate
It doesn’t take much imagination to figure out that mall owners around the world will be reviewing security following the Kenyan tragedy. What better place, sadly, to hold hostages than somewhere you can lease a shop to store weapons and then hole up ?with limitless supplies?
Clearly more than just a ?few more bulky doormen ?will be needed. Westfield, for one, has said it “does not comment” on security matters. But it would be surprising ?if security checks on ?unfamiliar tenants do not become routine.
PR factory recall
I was a bit mean about Jones Lang LaSalle last Saturday, suggesting the firm’s knowledge of the housing market was a bit thin, compared with that of Savills and Knight Frank.
At 1pm on Sunday, JLL issued an entirely sensible note suggesting the Tory announcement bringing forward the start of the Help to Buy initiative might fuel house price inflation.
“Help to Buy is too powerful a programme to be used as a political tool,” said head of residential research Adam Challis, hours before anyone else commented. Four hours later the statement was “recalled”. Being mean about the Tories is clearly a bigger sin at JLL than being critical of a government shifting into election gear.
? JLL does have undoubted expertise in the residential development market, brought in when the company bought King Sturge in May 2011. How close that expertise was to being bought by CBRE was explained to me this week.
On 4 February 2011, I wrote in the Evening Standard that CBRE was in “serious talks” to buy King Sturge. When the JLL purchase was announced three months later, I assumed I had got the wrong name. Not so, apparently. Negotiations between King Sturge and CBRE had reached a far more advanced stage than had been reported. Sensing the danger of once again being outpaced by its bigger rival, JLL upped its bid to a knockout £197m just as the CBRE deal was reaching closure.
