Last week I wrote about WeWork the documentary, due to be streamed shortly. Just in time for the launch, WeWork has agreed to merge with a special purpose acquisition company (SPAC), in a deal that values the company at $9 billion. It is just two years since WeWork’s failed IPO when it was valued at $47 billion.
One of the apparent successes of lockdown has been the way local councils have been able harness technology and migrate their meetings online. They have even gone viral at times, courtesy of Jackie Weaver and Handforth Parish Council. It is therefore disappointing to learn that MHCLG wrote to council leaders this week directing them to revert to physical meetings after 7 May 2021. This is because the regulations which permit virtual meetings during the COVID lockdown do not apply on or after 7 May 2021. The government has chosen not to extend the regulations as this would require primary legislation and the government’s legislative programme is already under severe pressure. If it is considered unsafe for councils to meet in person, the minister suggests delegating powers to officers or to individual councillors. It is not clear whether local councils have been consulted, but this does seem a step backwards.
It has been a good week for catching up with longstanding clients. My podcast with the iconic Harry Handelsman, founder and CEO of Manhattan Loft Corporation was released this week. Over more than 30 years, Handelsman has conjured vibrant communities within London’s unloved postcodes. From his first lofts project in Clerkenwell in 1992 to Manhattan Loft Gardens in Stratford in 2018, taking in Soho, Bankside, West India Quay, Notting Hill, Chelsea, King’s Cross, Fitzrovia and Hackney, he has consistently challenged convention and taken on difficult projects which he describes as ‘a labour of love’. He rejoices in finding ‘hidden gems’ and restoring them beyond their former glory.
Handelsman talked to me about the challenges of restoring, over a period of more than 10 years, the 1870’s gothic St Pancras Chambers, one of Britain’s most outstanding Grade 1* listed buildings. Manhattan Loft Corporation retains ownership of the 245 room St Pancras Renaissance Hotel and continues to take an active role alongside the hotel management. Look out for the reinvented Booking Office Restaurant opening later this year.
He was, along with US hotelier André Balazs, responsible for the redevelopment of the listed Marylebone Fire Station on Chiltern Street W1, which created the mega successful Chiltern Firehouse restaurant. Handelsman explained that he was attracted to the Chiltern Street project as ‘quintessentially what London is about’ and he wanted to create a destination that would put Marylebone on the map.
Handelsman was speaking to me from the 41st floor of his most recent project, The Stratford at Manhattan Loft Gardens in the Queen Elizabeth Olympic Park, E20. His aim was to create the ‘most beautiful building in Europe’ which would combine world class architecture, hospitality and art to encourage a new generation to make London’s east end their home. The backdrop of the extensive view over east London from his desk is nothing short of spectacular.
It also turns out that Handelsman was a pioneer of the ‘15 minute city’ concept. As he tells me, when he moved to London from New York in 1990, he could not understand why Londoners were happy to commute long distances to and from work ,as he preferred to walk or cycle. He set his sights on converting us to the joys of city living.
His advice to the next generation coming into real estate is ‘make it a labour of love, but do keep in mind the bottom line.’ You can listen to the podcast here: https://www.mishcon.com/news/podcasts/harry-handelsman or on Spotify or Apple podcasts.
It was also good to catch up this week with my long-time co-collaborators, Darryl Flay and Martin Bellinger, the original founders, alongside Scott Hammond, of Essential Land. We spoke on their first day in their new Mayfair offices. In fact, I was honoured to be their very first zoom meeting! In their new venture, they will partner with Australian bank Macquarie to set up a UK build to rent (BTR) fund which they will manage.
Although they are not entirely happy to be labelled ‘veterans’, they were one of the first into the UK BTR sector when they established Essential Land some 12 years ago. They are now planning the next iteration, which will be UK wide, whereas Essential Land focused on London. As befits our changed priorities in a post COVID world, their new product will be low rise with an emphasis on generous outdoor space. It will be multi-generational with living space design focused on good natural light, air and space to suit our newly adopted working from home habits. They will be targeting development sites across the UK and they tell me their first acquisition is already agreed.
It was a good opportunity to recall some of the highlights of the early BTR journey. At Mishcon de Reya we partnered with Essential on a series of high level private dinners with the key players in the early days of the sector. The discussion around how to find a name that would differentiate the burgeoning professional new sector from PRS particularly stands out. Multifamily was the existing American name but we wanted something different for the UK. So we agreed round the table to go with Build to Rent as, at the time, not many units had come out of the ground. Although I believe L&G’s Bill Hughes did raise a relevant point as to whether ‘Built to Rent’ would be a more appropriate name once developments had been built out. At one of our BTR dinner debates we were tasked with putting together a wish list for the sector as then housing minister, Brandon Lewis who was supportive of BTR but was being met with differing demands, had challenged us to tell him what was needed by way of government support. We put together and dispatched a wish list but the letter was held up in the post, and somehow appeared in the press before it reached the minister, which was not ideal. Flay and Bellinger, rolled out a roadshow to try to educate local and central government on the benefits of this fledgling housing offering, and how it could, alongside market housing, help alleviate the ever-growing housing crisis. We attended lunches in parliament and travelled the country to host dinners at the Labour and Conservative party conferences in order to spread the world. Now the foundations have been successfully laid, I very much look forward to continuing the journey as Flay and Bellinger write the next chapter of their BTR journey alongside Macquarie.
With all the gloomy news of retail closures, I would like to finish with a retail story with a happy ending. In 2005, university friends Christiaan Ashworth and John Parker invested £20,000 each to set up a menswear shop END in Newcastle. Seeing the potential for driving online sales, they launched their own e-commerce website in 2006 pioneering the combination of high-end luxury with streetwear. Branches followed in Newcastle, Glasgow and Soho. Ashworth and Parker have now sold a majority stake in their luxury online fashion retailer to The Carlyle Group, valuing their retail empire at more than £750 million. So don’t write off retail just yet!
And look out for a new restaurant chain coming to the UK. Miami based fried chicken chain Popeyes is to launch its first UK eatery this year, as the first in an ambitious plan to open 350 UK sites in the next 10 years. The chain, which runs 3,400 restaurants globally, sees the UK as its ‘next big opportunity’ for growth following its rapid rollout in Spain and Switzerland.
Susan Freeman is a partner at Mishcon de Reya
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