Stephen Fry, Benedict Cumberbatch and EastEnders’ June Brown all agree – Soho is in danger. What was once a lively, cosmopolitan, devil-may-care zone of creativity is turning into a Mayfair overspill.
Dull men who work with money – hedge fund managers, not the pimps and racketeers of old Soho – are moving in, paying record rents of £100 per sq ft. Meanwhile, honest, dirty, cabbage-strewn Berwick Street is being pseudo-cobbled. How fake. It’s all very sad.
But is it? Are celebrity names seeing Soho’s seedy past through the rose-tinted spectacles of the Groucho Club and middle age? Or has Soho always changed – from a smartish French suburb in the 18th century, to Chinese slum housing of the early 20th century, to the cheerful and successful mix of today?
Opinions are sharply divided – and it is not just a stand-off between creative-industry campaigners and their showbiz pals on one side and landlords and developers on the other. There is also a difference of opinion among landlords. Even the two offshoots of Paul Raymond’s property empire, Soho Estates and Raymond Estates, have differing views.
Soho Estates is behind the controversial 30,000 sq ft Walker’s Court scheme (pictured), while Raymond Estates’ Howard Raymond is on the Save Soho committee chaired by Stephen Fry. Save Soho regards Walker’s Court as yet another sign that Soho is turning into something chillingly respectable.
The Walker’s Court controversy follows Soho Estates’ 2013 repossession of Madame Jojo’s, a venerable cabaret nightclub that lost its liquor licence.
“It’s all about pragmatism,” says Raymond. “We are not opposing development, but saying: be careful, slow down. We want to stop all parts of London morphing into one another.
“It’s not that Walker’s Court is not the right scheme, but it has to be worked on. What people object to is that you won’t be able to walk in the door there for a fiver – and you need some of the rough-and-ready in Soho. We don’t want to let the place go too far upmarket.”
Raymond demurs at the suggestion that the two successor businesses (see box below) are at odds. “They have a way to do things, so do I. There’s no conflict,” he says.
John James, managing director of Soho Estates, agrees. “There is no dispute with Howard,” he says. “Howard represents a competitor firm, but he is also our neighbour and we have known each other for many years. Save Soho appears to be opposed to any change in Soho, and for that reason we cannot join its committee, but that hasn’t stopped us from talking to them.”
James adds: “We have had very positive discussions with Stephen Fry, who is on Save Soho’s committee. He was particularly happy to hear about the return of the Boulevard Theatre, as he performed there early in his career.”
James insists that his business understands Soho’s unique feel. “Soho is always changing and evolving – that is its charm,” he says. “We are committed to keeping the spirit of Soho – edgy, but not sleazy.
“In some parts of Soho, the buildings are looking tired and run-down. As a landlord, we look at our holdings and see what we can do to make improvements. That can mean redevelopment, and getting the right mix of tenants, but it also means working with those that have a stake in the community, the people living and working here. The community is hugely diverse, it is everyone from performers to shopkeepers to post-production film and TV companies. The thing that people in Soho tend to have in common is a creative spark.”
The area’s other major landlord, Shaftsbury, also insists it gets Soho’s unique vibe, and says the only thing under threat in Soho is seediness.
Director Simon Quayle says: “Soho has always changed and evolved – in our view, for the better. It has lost the seedy sex-shop image; it’s now a proper village. It’s now an area where people feel safe.”
The fact that so much of the sex industry is now online has freed up Soho floorspace for more interesting projects, independent retailers, and the media-creatives who dominate its workforce.
Camilla Topham, partner at leisure agent Shelley Sandzer, agrees. “Yes, the Soho mix is changing, which is what you see in any area that is desirable and fashionable, but I don’t see it as gentrification,” she says. “The independents are stronger than ever and the big brands that have been attracted to Soho found it didn’t work – Giraffe and Leon have both come and gone. The Soho market still stresses independents and edginess, and the brands can’t stand up to the dominant bohemian vibe.”
With leisure rents between £100 and £110 per sq ft, Soho is still appreciably cheaper than £190 per sq ft Mayfair, says Topham.
Yet office and investment agents detect signs that Soho is becoming “Mayfair-esque”. Knight Frank partner James McCluskey says: “The mindset of people running Mayfair businesses is changing. They want more interesting options at lunchtime than the white tablecloths of Mayfair.”
Mayfair hedge funds and private equity firms have moved into F&C REIT’s 33,000 sq ft 25 Great Pulteney Street, and when 1 Golden Square changed hands last year for £18.5m (a 3.22% yield), plenty of underbidders saw Soho as a natural addition to their Mayfair portfolio.
McCluskey, who advised on the Golden Square sale to Bauer, says: “There is interest but there is a limit on the Soho market. It has small buildings on small streets, so there is no ability to create the big office floorplates and office stock will always be varied, unless we see major demolition of Soho, which we won’t.”
So, pending the unlikely event of large-scale urban clearance, Soho will remain much like Soho for many years to come.
Walker’s Court
Work on Soho Estates’ 30,000 sq ft Walker’s Court scheme will begin later this year and will be phased over two to three years.
It will include two clubs, one of which will be a reincarnation of Madame Jojo’s, founded by Paul Raymond in 1987. Plans also include the resurrection of the famous Boulevard Theatre, home of the original Comic Strip comedy show, which started the careers of the likes of Dawn French and Eddie Izzard.
The Raymond Revuebar, home to the UK’s first live striptease show, opened in Walker’s Court in 1958.
Getting pricey
Occupiers priced out of Mayfair are migrating to Soho, helping to push Soho rents up to £100 per sq ft.
Carter Jonas’ data suggests Soho rents have risen from £37.50-£47.50 per sq ft in 2009 to £65-£87.50 today, with rumours that UBS could breach £100 per sq ft at its £45m revamp of 12 Golden Square.
Carter Jonas partner Michael Pain says: “Developments such as the Crown Estate’s AirW1 have set new benchmark rents for Soho in the top £80s per sq ft.”
Rental growth is underpinned by limited supply. CBRE calculates that just 2.6% of Soho’s 5.4m sq ft total office stock is vacant. The development pipeline is 615,000 sq ft up to 2018.
CBRE partner Simon Lee says: “The cheaper, down-an-alley-above-a-strip-bar office suites have mostly vanished into the residential market. Soho has lost a lot of office space since 2008.”
Family ties
Paul Raymond died in March 2008. Today, his interests are managed by a series of trusts for the benefit of his descendants. The entertainment companies were sold in 2010. In 2011, the James and Raymond families agreed to a partition of the trusts, which released a minority share of assets (in the form of properties) for Howard Raymond and his children.
Soho Estates is run by Paul Raymond’s son-in-law, John James, for the benefit of Raymond’s granddaughters, Fawn and India Rose James.
Howard Raymond runs Raymond Estates. Soho Estates replaced the assets handed to Raymond Estates with the 2012 acquisition of the Foyles family’s nine West End properties.
The real threat
Recently granted permitted development rights allowing change of use from office to residential do not win many friends in Soho.
oward Raymond is dead against, and Soho Estates’ John James says: “We feel there is a conflict between national planning policy, which encourages the conversion of commercial space to residential, and the special nature of Soho.”
Shaftsbury director Simon Quayle adds: “I know it is a hot topic and one that is taxing Westminster council, but it is all about maintaining the mix of uses.”
