The heart of London is owned by a handful of aristocrats and, since less than half a century, by a number of companies. What has shaped the map of London property ownership An article by Géraldine Vessière, L’Echo, 19 October 2013.
When you are taking a stroll in Regent’s Park or doing some shopping in Regent Street, you are wandering around properties owned by the British Royal Family. If you stop off at the Belgian Embassy, you are, in fact, visiting the Duke of Westminster. If you lose your way in Edgware Road, you may well find yourself in an area owned by the Church of England and if you are stopping off at the US Embassy, you are in a property owned by the Emir of Qatar.
Indeed, a large part of central London is owned by a number of aristocrats. Recently, over a period of less than half a century, some of this area has also been acquired by large companies.
Family Estates
Map of London, Richard Blome, 1673
It all began in the 17th century. In those days, the town was primarily located to the north of the Thames, in what is now the City. It was surrounded by fields and only counted 500,000 to 600,000 inhabitants. The English Parliament, which became the British Parliament in 1707, had just found a permanent home at Westminster. The nobility purchased land in the vicinity to be close to this seat of power. However, we were seeing the dawn of the Industrial Revolution. A rural exodus, immigration, increased economic activity and the development of means of transport… London’s population continued to grow.
Between the dawn of the 18th century and the close of the 19th, it increased from one to eight million. Within a hundred years, the city had begun to encroach on the countryside and to absorb neighbouring villages. The need for housing grew explosively. To allow new housing to be constructed, the aristocrats decided to give up their land, albeit only for a pre-determined period of time. This was usually 99 years, in which the occupants of the site were allowed to erect buildings. At the end of the contract, both the land and the buildings had to be returned to the original landowner. In some cases the landowners themselves were in charge of construction and collected rents on the buildings, still based on the same principle. In other words, they enjoyed the fruits of their assets at the expense of others whilst safeguarding the inheritance of future generations. This was the beginning of family domains, or ‘estates’.
Pragmatism and Traditions
Marylebone hight street
Three hundred years later, this situation has barely changed. The aristocrats did suffer a few hard knocks during the previous century. Parts of central London were destroyed during the war. High inheritance taxes weighed heavily on a number of estates. And the introduction of a law allowing long-term tenants to acquire ownership of the property they were living in, which forced the owners to sell it to them, caused some estates to break up and others to be wiped off the map. However, many have survived and even prospered.
The land-owning families have adjusted to this new reality. They have adopted a more professional attitude, have placed their assets in trust to avoid inheritance tax and have started to play a more active role in the management of their assets. This allowed them to influence the character of the area forming part of their estate with the aim of attracting a particular type of tenant, preferably one with a well-to-do background.
The Howard de Walden family was the first to embark on this course of action. Within a few dozen years, the image of Marylebone High Street was transformed. The family assumed an active role in the allocation of property and hand-picked the traders who were allowed to open their stall on their block. The result: an ageing population has gradually been replaced by a young and wealthy clientèle and the wide range of small independent shops and restaurants reduces the risk to the family of being forced to sell the freehold.
The success of this project has encouraged other estates to adopt a similar approach. The Crown Estate for example, that manages royal property, has put major efforts into revamping Regent Street. Travel agents and kitsch souvenir shops have gradually made way for international brands operating at the top end of the market, including prêt-à-porter. « The British Crown Estate attracts tenants by profiling Regent Street as a showcase, allowing retailers to test the British market prior to opening further outlets in the city itself or further away. This approach is working very well”, comments Tony Travers of London School of Economics. « In contrast, Oxford Circus is owned by many different parties, which is not conducive to a coherent estate management policy”.
Canary Wharf by night
Canary Wharf, the second largest financial centre in the City of London, and now also Wood Wharf, which is still under construction, have also been developed with a particular goal in mind. These areas want to attract a specific population as well as two particular types of activity: finance and technology. “Once completed, Wood Wharf will look like a university campus rather than a collection of skyscrapers. Ownership of an entire district instead of just one building allows an integrated and tailor-made design aimed at a specific public. This would be far more difficult to achieve if you were just constructing one single building in the city centre”, is the opinion of Peter Murray, President of New London Architecture.
New Players
Neither Canary Wharf nor Wood Wharf are owned by the aristocracy. Both are part of the Songbird Company, a subsidiary of the Qatar Investment Authority (QIA), an independent investment fund owned by the Emirate of Qatar. Songbird’s property also includes Harrods and the Shard as well as half of the Olympic Village and Chelsea Barracks, two regeneration projects which offer or will offer luxury apartments.
These large investors entered the fray in the second half of the 20th century. Some have purchased established family estates. Capco for example recently took over Covent Garden, built by the Fourth Count of Bedford in the 17th century. And Paul Raymond, publisher of ‘adult’ magazines and the owner of several Soho nightclubs, invested the fruits of his labours in property on ‘his’ home turf. In 2012 the Soho Estates company was valued at 329 million pounds, His story has even been turned into a movie.
Other companies are involved in construction from scratch, mainly developing run-down industrial areas, known as brownfields, or by demolishing swathes of impoverished social housing, which, to support their marketing strategy, they refer to as ‘slums’. King’s Cross, a development supported by BT’s pension fund amongst others, has managed the regeneration of the district around the railway station that sees Eurostar depart for Paris, Lille and Brussels.
Into this mix now enter a number of wealthy individuals who are expanding their London property portfolio. Worth mentioning is the Russian oligarch Roman Abramovich who has taken up residence in London’s most expensive street, Kensington Palace Gardens, at the rumoured purchase price of 90 million pounds.
Having said all this, it is not always easy to obtain exact data as to who owns what in London. The leasehold system obscures the view – are the occupiers long-term tenants or the genuine owners? Also, some of the main players hide behind shell companies based in tax havens that act as a front.
Public vs. Private
Russian Embassy – Kensington Palace Gardens
Whether they were set up by companies or resulted from a family heritage, the fact is that these estates are now acting, at least in part, as public authorities. They have to comply with the urban regulations imposed by the various councils. However, it is more than likely that fewer constraints are imposed on them compared to real estate owners in Belgium, for example. London’s landlords have a far greater freedom when it comes to the allocation of premises and the profile of retailers and businesses that apply for tenancy. Also, there are some landowners who own entire streets within their estate. This allows them to influence public life to some extent.
« There is a tacit understanding between private ownership and local government”, comments Peter Murray. “The local authorities are happy to have access to the money and know-how that the estates contribute to public areas. On the other hand, it is likely that the estates are delighted to have some control over how the family inheritance is invested.”
« This approach has the advantage of attracting investment from abroad, but at the same time, it increases property prices which in turn leads to an exodus of young people and the less well-off. They are moving out of Central London or of the capital itself”, Peter Murray continues. When the Crown Estate decides to refurbish some of the property it owns in Regent’s Park or Kensington Palace Gardens to meet the needs of foreign billionaires, it forces the middle classes to move out to other areas that are further away from the city centre but more affordable. It leads to a cascade reaction and causes property prices to spiral upward all over London, the main victims being eventually the people on a low income.
The concept of public spaces that are managed by private companies throws up a number of other issues. In this respect, Canary Wharf receives quite a lot of criticism. It employs private security companies and its population could almost be described as ‘managed’. Here, you will never come across the homeless or the poor, even though this area is surrounded by deprived communities – and the photographer or cameraman who risks to take out his or her photo or video camera without permission may expect some trouble. Peter Murray states, “To avoid this type of situation at King’s Cross, the local authority has agreed with the redevelopers that the authority itself will be in charge of the general areas and thus, of safeguarding the privacy of the individual. »
Extract of the Map of London’s Great Estates produced by New London Architecture
To view the entire map of London’s Great Estates, produced by New London Architecture, click here (pdf)
| Location of the most important estates1. Crown Estate, owns properties throughout England, several hundred of which are in London. Main areas: Regent street, Regent’s Park, St James, Kensington Palace Gardens, Richmond, South Bank. Total value of portfolio (not limited to London) in 2012: £8.1 billion. However, in practice, Crown assets are not really owned by the British Royal Family. In 1760 the revenues emanating from the Crown Estates were signed over to the State by George III in exchange for an annual allowance called the Civil List.
2. The City of London Corporation. The origins of this Estate can be traced back to 1478. Nowadays, its property portfolio extends over 20,439m² and includes in excess of 1240 properties (Barbican, City of London, …) 3. The Portman Estate. Goes back to the 16th century. 44.5 hectares (110 acres) in Marylebone. Value undisclosed. 4. Bedford Estate, owned by the Russell family who are related to the Dukes of Bedford. Bloomsbury area (close to the British Museum, the British Library, Russell Square and a number of universities). Established 1669. 12 hectares (almost 30 acres). 200 buildings. Value of assets not disclosed. 5. Grosvenor Estate, a property company owned by the Duke of Westminster and his family. Has owned land and property throughout England from the year 1167, including over 4000 properties in London, most of which in an area covering 121.4 hectares (300 acres) in Mayfair and Belgravia. 6. Howard de Walden Estates has owned parts of Marylebone from 1711. The estate currently comprises approx. 37 hectares (91.5 acres) with 700 private residences, retail outlets, business premises and hospitals. 7. The Cadogan Estate manages a large part of Chelsea. It was acquired through marriage in 1717 by the Second Baron of Cadogan. The value of the assets is not published. 8. The Church Commissioner Estate manages a portfolio to the value of £5.5 billion pounds, originating from historic investments by the Church of England. One third (£1.18 billion in 2012) is invested in real estate. The London property portfolio comprises over 1,800 private residences, primarily in the Hyde Park area. 9. King’s Cross. The King’s Cross Limited Central Partnership was set up in 2008, although the regeneration of this area began in 1996. A site of 26 hectares (65 acres) that, once completed, will include 2000 apartments, 0.31 million m² of office space and 46,452m² available to retail. 10. Soho Estate, constructed between 1970 and 1990. 2012 asset value: £329 million. (several buildings in Soho). 11. Capco-Covent Garden. 83,613 m², comprising 63 properties. Value: £1.1 billion. Purchased in 2006. |
The exhibition « Great estate. How London’s landowners shape the city », organised by New London Architecture, from 17 October – 19 December 2013, looks into these issues. The Building Centre, 26 Store Street, London.
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Posted on 19 octobre 2013 par Géraldine Vessière
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