In his Letter from London, Columnist Peter Bill discusses his trip to the Urban Land Institute’s inaugural UK conference in May.
Only the ULI could persuade Goldman Sachs to open its unmarked doors on Fleet Street to 200 or more outsiders. But then there was at least a 25-strong baseball squad’s worth of heavy hitters on the roster.
Appearing were the European bosses of Blackstone, Lone Star and Eastdil, along with the UK’s foremost developer, a baroness and Jim Garman, Goldman Sachs’s global co-head of real estate. And all presided over by a New Zealand-born Dame of the British Empire, special adviser to Tishman Speyer: Dame Judith Mayhew-Jonas.
The most intently-heard session was, ‘Where’s the smart money going?’ Four smart men were on stage: Jim Garman, asking questions of Anthony Myers from Blackstone, James McCaffery from Eastdil and Angus Dodd from Lone Star, the only Englishman and a man who confessed to buying Wembley developer Quintain for £745 mln (€978 mln) ‘because it was cheap’. Crikey.
‘Spain and Italy are where we are focussing now,’ said Dodd. The focus being on what McCaffery of Eastdil estimated to be ‘hundreds of billions’ of distressed debt. Myers grumbled that it is harder to find opportunities in ‘more challenging’ Europe and that the whole darn place is ‘less efficient’ than the US. Garman predicted: ‘Italy will be the next big market to sell non-performing loans.’ But only if the governments of Italy and Spain man-up and start dishing it out in parcels of $1 bn or more, was the consensus. ‘At what
levels of discount,’ I asked?
‘Think Ireland at the start’ said Dodd, meaning 16-60 cents per euro. None showed much interest in London, apart from hinting that some large deals are stalled ahead of the EU referendum result on 23 June. But I got to chair a post-lunch session on the capital. Those then grilled included Sir Stuart Lipton, who celebrates 50 years in property this month. The man behind Broadgate is, beyond the conference, closely overseeing the second panellist, Lee Polisano, an American architect of quiet demeanour, who has squeezed 1.4 million sq ft (130,000 m2) of space into a 62-floor skyscraper at 22 Bishopsgate for Sir Stuart and funders AXA.
Clearly a man you need to know. Previous designs for the 73-floor Pinnacle on the same site contained 400,000 sq ft (37,160 m2) less space. How come? I discovered afterwards that it is all about having tension piles and floors that keep the skyscraper from wobbling too much in the wind – and so being able to ‘fill out the planning envelope.’
I digress, sorry.
The third member of the panel was Adrian Penfold of British Land, which is currently busy re-vamping Sir Stuart’s 25-year-old Broadgate, and representing the establishment was Baroness Jo Valentine, an ex-banker of influence in those unseen British circles that shape things. Their brief was to imagine London in 2040. A difficult task which Jo Valentine gamely tackled, imagining a dystopian vision of London, alone and starving outside the walls of the European Union.
There was a brief skirmish between Sir Stuart and Penfold on the 700,000 sq ft (65,000 m2) offices for UBS at 5 Broadgate by Ken Shuttleworth. ‘Ken the Pen’ was fortunately absent – he had spent much of the morning in the audience, doodling in his sketch book. But Sir Stuart was gracious about BL’s designs to quintuple floor space to 550,000 sq ft (51,100 m2) at 2/3 Finsbury Square and add lots more shops and bars.
Those thinking of buying land round the North-South route of Crossrail 2 will be cheered to hear that Jo Valentine feels things are going a lot faster than the 30-year saga of Crossrail 1. But how is the giant site of one Crossrail station going to prevent Old Oak Common from turning into Nine Elms (bad development) rather than the Olympic Park (good development)? A question asked after the chief executive of the agency set up to redevelop 950 hectares of land, Victoria Hills, had earlier showed a less-than-thrilling fly-through of the 24,000 homes to be clustered around an HS2 and Crossrail 1 station.
You cannot chair and write notes, but I don’t recall anyone having an answer.
Peter Bill is author of Planet Property and former editor of Estates Gazette
