At some point this week the trustees of the Duchy of Lancaster will surely have sat down with a senior courtier from Buckingham Palace to discuss the ‘Paradise Papers’.
Not hard to imagine the scene: man from Buckingham Palace (with quiet menace): “What, for pity’s sake, were you thinking of, putting money into sunny overseas spots full of shady people?
Let me remind you of the first rule for those who manage royal money: keep the Queen out of the press! Why could you not see that putting £10m into funds where you don’t know the end investment does not pass the Private Eye test?
In other words, would the Queen be embarrassed by the disclosure?” (His lifelong composure breaks): “Well, she sure as hell has been, you idiots!”
Eminent trustees look at the table, embarrassed by this terrible lack of manners. One raises his silvered head: “Well, I’m not sure that’s entirely fair. The £10m is only a small part of a £70m investment portfolio, which earned us £2.7m last year.
The on-shore property portfolio has increased in value from £396m in 2013 to £556m this year.” (His lifelong composure then breaks): “The money we give you lot has gone up from £12.7m in 2013 to £19.2m today. What do you want, blood?” (Curtain falls to the sounds of bitter recriminations and an exquisite china teacup smashing into smithereens.)
Landlords, fear what comes next from Next. Last week’s trading statement revealed store revenues down 7.7% year on year. A fall that will add further pressure on the property team to squeeze down rents across the 8m sq ft of trading space spread over 520 stores and concessions.
“Managing down our cost base” was given priority by chief executive Lord Wolfson in September, after store profits dropped 33% to £90m in the six months to July, over 2016.
Lurking unremarked upon in his statement came one revealing sentence: “Over the last six months we have renewed eight leases, their combined rent reduced from £2.9m to £2.2m.” Close to a 25% reduction. What next?
Next has what it ominously calls a “relatively flexible” portfolio, with 72% of all leases expiring by 2027. No guesses as to what comes next for landlords facing lease expiry negotiations.
Sadiq Khan is not a popular man. The mayor of London is an inaccessible, cold-hearted political careerist. This son of a bus driver won’t give a damn. Given, these are the views of London’s development community. After all, his own soft-left constituency see him as accessible and caring; ambitious, yes, but on the side of Londoners, not wicked developers. Trouble is, wicked developers now don’t give a damn about Khan’s plans for London.
Hear first from the chief executive of a major plc, a man wishing to build thousands of homes in the capital. “I’ve never even met the man. He’s inaccessible. Boris Johnson was someone you could talk to, he was supportive. It’s not a political thing. Ken Livingstone was even keener to support development. Sadiq appears to be more interested in his post-mayoral career than he is in ensuring London can accommodate population growth.”
Now the boss of a pure housebuilder. “Pushing his 35% affordable homes agenda is causing delay after delay as we fight over the financials. Khan seems more interested in being able to boast about meeting his target than he is about actually getting homes built. The whole system of us trying to prove what can be afforded and the GLA trying to prove what we can afford to subsidise has turned into an utter, time-consuming nightmare.”
Khan’s habit of throwing bricks at government rather than talking to those who lay them contributes to a sense of disillusion
Third, a lobbyist, of leftish leanings. “The problem with Khan is that he is sat in his ‘golden room’ at City Hall, guarded by those interested only in maintaining his reputation, rather than getting things done. The atmosphere is highly political and at times poisonous. Jules Pipe, [deputy mayor for planning] seems a decent bloke. James Murray [deputy mayor for housing] is bright. But there is confusion over their roles.”
Khan’s habit of throwing bricks at government rather than talking directly to those who lay them contributes to a sense of disillusion. The latest example is his assertion that London needs 66,000 new homes a year, 44,000 of them subsidised. About 13,000 of the latter will be completed this year. If Philip Hammond does not quintuple London’s housing grant in his 22 November budget, the failure to reach the target will be Whitehall’s, says Khan.
Finally, this from a July New Yorker profile. “People seeking to explain Khan’s rise often talk about his gift for knowing what the mood is. ‘Is ‘chameleon’ the right word […] No, he is more of a submarine. He rose without trace.’”
Khan’s 2016 mayoral election manifesto promised to build an alliance to build more homes. He pledged this alliance “will include developers and homebuilders.” Come along, Sadiq, surface; they won’t bite.
10 November 2017
20 October 2017
18 October 2017
6 September 2017