Howard Raymond tells Louise Dransfield about his cinema-centred upcoming attraction on the King’s Road – and why he believes Londoners will continue to embrace leisure after lockdown.
Like his late father, Howard Raymond knows there is value in vices. Paul Raymond, often referred to as the King of Soho, built an empire on the adage that sex sells, owning strip clubs and publishing pornography.
Decades on, business has “been booming” during lockdown for Howard’s own interests in the alcohol industry. At Distil, an AIM-listed drinks business in which he owns a stake, revenue rose by a fifth year-on-year between April and June. Raymond also has a gin brand named King of Soho in honour of his father, for whom it was the drink of choice. “It was de rigueur – once you’d made it, you had gin,” Raymond says.
The vices may have changed, but one line of work in which Raymond has happily followed in his father’s footsteps is real estate. Having inherited a chunk of Paul’s portfolio after he died in 2008, Raymond has since built on that foundation. “Having been brought up in it, it’s like second nature,” he says.
Upcoming attraction
Raymond laughs and jokes throughout our conversation but becomes reticent when the details of his wealth and businesses are brought up.
“I don’t really want to appear on any lists if I can avoid it,” he says. “At the end of the day we’re a private company, and I don’t really think it’s necessary for the public to know how much money I have or haven’t got.”
Reports said he received around 20% of his father’s property business in 2011, which at the time included up to 90 freeholds, mainly in Soho but also around Covent Garden, Mayfair, Notting Hill and Chelsea. Raymond declines to shed any light: “It’s been suggested 20% and I’ll stick with that, I think.”
And the estimated £78m he inherited? “Allegedly, but yeah I’ll take that,” he says, before adding: “I hope it’s bloody gone up a bit since then.”
The portfolio of property Raymond inherited formed the basis for Raymond Estates, which he runs with his cousin, Mark Quinn. In its most recent accounts filed at Companies House, the company reported tangible assets of almost £115m and a pre-tax profit of £9.1m for the year ended 31 March 2019.
We wanted Winston Churchill and we ended up with bloody Neville Chamberlain
Raymond’s other businesses include llona House Securities, the vehicle through which he has been redeveloping 279 King’s Road in Chelsea, SW3. The scheme, set to launch later this month, will house the capital’s sixth Everyman cinema complex.
The £15m art house movie theatre, which features two 190-seat auditoriums and a screening room as well as a café and wine bar, is part of a wider 40,000 sq ft development that also includes 11 flats and ground-floor retail. The flats are still being finished, but Raymond says he already has 150 viewings booked in for when they are ready and has no worries about being able to sell them.
The launch will be the culmination of a long journey for the project, which took four years to get planning consent after concerns were raised over affordable housing and eventually won consent on appeal. The hold-up still irks Raymond, who describes Kensington and Chelsea planning officials as “lunatics” who “argued absolutely everything” and “think we have to live in some sort of Victorian utopia”.
A spokesperson for Kensington & Chelsea Council said: “Our borough has a unique character and lots of listed buildings – it’s absolutely right that we preserve that, as well as listening to our residents’ views throughout the planning process. Now the plans are agreed and the cinema is ready to open, we’re happy it’s here. It’s going to be a great addition to the famous King’s Road, attracting more visitors as we protect and rebuild our local economy following the coronavirus pandemic.”
‘It’s a shambles’
Opening a new leisure-focused project as a four-month Covid-19 lockdown threatens to decimate the sector is a bold move. But Raymond has an unwavering belief in Londoners’ appetite for good times and good food. Further into the West End he is busy developing a new restaurant in Soho and says he has “never had so many viewings”.
Pragmatism is key for Raymond, and he believes restaurants will remain a staple of the UK’s high streets.
“While people will disappear off the scene, sadly, there’s a lot more going to come in and replace them,” he says. “I suspect, ultimately, that nationally around 30% of businesses will go to the wall over the next few months. That entire 30% may not be replaced but there will be others to take over.”
Raymond has helped out tenants who rely on income to pay their mortgage and live, but says he has taken “a much sterner line” with bigger business owners who have cash reserves but “seem to think they don’t have to pay any bills”.
He is equally unimpressed with the leadership of Boris Johnson’s government during the crisis. “We wanted Winston Churchill and we ended up with bloody Neville Chamberlain,” he says. “It’s a shambles. I mean, you could get your hair cut but you couldn’t get your nails done [as lockdown was eased]… I don’t understand the logic behind any of it.
“And you’ve got all these air bridges [to encourage international travel], but most of the countries won’t let us in anyway. The whole thing’s crackpot.”
Property, I’m very relaxed about… It’s all pretty obvious stuff – you just have to think ahead of the curve, don’t you?
However, there have been silver linings, and worries over international travel have opened new opportunities for Zepiair, Raymond’s private jet company. Busy with repatriations before what Raymond terms “a quiet month” as coronavirus struck, the company has now seen bookings soar again as clients shun commercial flights. “We’re rushed off our feet,” says Raymond. “It’s gone nuts.”
But he laments missing out on the usual spring trade to the south of France – the company would traditionally run a shuttle service to property’s biggest annual gathering, MIPIM, which was cancelled this year due to the pandemic.
Fingers burnt
With humility, Raymond downplays the work and effort necessary to get ahead in the real estate industry, claiming he struggles to think of any big lessons he has learned over the years. “Property, I’m very relaxed about. It is what it is,” he says. “It’s all pretty obvious stuff – you just have to think ahead of the curve, don’t you?”
But he acknowledges that there will be tests to come. Covid-19 has presented “an interesting conundrum” for the property sector, accelerating trends such as home-working.
“I would not now even contemplate doing 100,000 sq ft of office on spec because I’m not terribly confident, unless you’ve got a back-end user for it, that you’re going to get the thing away,” he says. “It’s going to be a period of letting the dust settle a bit, because I think a lot of companies are going to have to re-strategise on what they’re actually going to be doing.”
And despite housing minister Robert Jenrick’s plans to allow vacant property to be redeveloped as housing, Raymond doubts that people are going to “dive in and buy property and flip it”.
“There’s only so many offices that can be converted into houses in central London because doing it is bloody expensive. Land costs are astronomical. You can’t give housing associations £10m flats all over the place. It’s not going to work.”
I would not now even contemplate doing 100,000 sq ft of office on spec because I’m not terribly confident that you’re going to get the thing away
But for his own part, Raymond is still buying and still focusing on leisure, as well as carrying out a £100m refurbishment programme across his existing portfolio. “I’ve got a few opportunities on the horizon. If I can put those to bed in due course, I’ll be happy. Most people have had their fingers burnt in leisure, but we like it.”
Several deals for value-add targets are technically agreed, Raymond adds. “We’re probably the only realistic buyers who are going to take them. Number one because we’ve got cash and number two because over the years we’ve had a relationship and [the sellers] know we’re good to get on with it.”
Raymond shies from divulging details, but don’t expect him to stray too far from the family stamping grounds. “I don’t go past the West End,” he says, although he adds that, despite being offered new Soho deals “all the time”, the sub-market has little left to attract him.
“Put it this way: I don’t have a hit list of Soho properties any more,” he says. “I’ve kind of got what I want.”
To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette
