August 2011 – The Mayfair Times
Mayfair’s biggest eyesore has been sold to billionaire businessmen and philanthropists Simon and David Reuben. So, what will they do with it now? Erik Brown joins the speculators.
The Piccadilly Estate – 1.3 acres of prime real estate in six buildings, including a Grade I listed mansion – is just 984 ft north of Buckingham Palace, according to sales particulars produced by international real estate adviser Jones Lang LaSalle.
Last month it was sold to the Reuben brothers for £130 million – £20 million below the asking price. And already there is speculation that the mansion – the former home of a prime minister, Lord Palmerston, and later of the Naval & Military Club – will itself be converted into a 21st century palace, a super-prime property that could go on the market for as much as £350 million.
If it does, the Reuben brothers won’t be the only ones punching the air. The Piccadilly Estate has been Mayfair’s biggest eyesore since the Naval & Military Club failed to agree terms on a new lease on Piccadilly and moved out on February 1, 1999.
The Piccadilly Estate had previously been owned by Anglo Swiss Holdings, an offshore trust vehicle advised by Syrian investor Simon Halabi.
The aim had been to convert the 18th century mansion at 94 Piccadilly into a luxury hotel and private members’ club and plans were drawn up by the architect Auckett Fitzroy Robinson. But the site was placed into Law of Property Act (LPA) receivership after lenders pulled out.
Alsop the LPA receiver employed Jones Lang LaSalle to sell the estate, which in 2009 had a price tag of £250 million, for just £150 million.
At that price, you would have thought it would have drawn investors in like wasps to jam on a sunny day. But it’s not an easy site. The mansion, built in 1756 for the second Earl of Egremont, is said to be in a poor state. Industry magazine Property Week reported that visitors’ feet actually broke through the floor as they were being shown round. And, like Buckingham Palace, it is Grade I listed, which means that any refurbishment will be subject to intense official scrutiny.
In the year from June 2010, the estate was thought to have been put under offer several times, but all of the bidders eventually withdrew – until the Reuben brothers bought it.
That should have come as no surprise. The Piccadilly Estate backs on to Shepherd Market where the Reubens have significant property holdings, including property on White Horse Street, which runs along the east side of the site on sale. The Reuben brothers should have been in the top five on any list of potential buyers. Property industry insiders believe they were just waiting for the right time to play their hand.
David and Simon Reuben are British citizens and successful businessmen, involved in private equity and venture capital investments as well as real estate ownership, investment and development. They are also major philanthropists through the Reuben Foundation, a UK-registered charity set up in 2002, with an initial endowment of $100 million, which produces an investment income that is donated to charitable causes.
Famously, they don’t give interviews. A call to their PR company, Luther Pendragon, was entertaining in a Yes Minister kind of way but yielded little other than a chuckle when I asked to talk to either of the Reuben brothers.
Even so, a story speculating that the 18th century mansion would be returned to its original use as a residential property has appeared on the Reuben brothers’ website. Did that mean that it was true? It’s early days, the spokesman said.
And that, probably, is the truth of it. But with residential property values soaring way above commercial property values in Mayfair, the betting is on residential.
We asked estate agent Peter Wetherell what he thought. “The former home of the In & Out Club is one of Mayfair’s oldest mansions and has a large vacant site behind it, so the square footage could be 75,000. It could be a palace, so you could be talking £350 million.”
94 Piccadilly is one of only three mansions in Mayfair that is set back behind gates – the Saudi embassy on Curzon Street is one of the other two.
And that’s not all. On the corner of the site is Green Park House, a 25,000 sq ft property with decent views. It could, Wetherell suggested, be turned into lateral apartments at prices nudging £4,000 per square foot.
The end value of the whole site – including an office block at 100 Piccadilly – could be as high as £500 billion, he said.