EXCLUSIVE: Major Soho Development Site Owned By Property Grandee In Receivership
A major redevelopment scheme in the middle of London’s West End, previously owned by one of UK property’s best-known names, has been put into receivership and administration.
The mixed-use scheme at 90-104 Berwick Street in the heart of Soho was put into receivership last November and administrators were appointed to the special purpose vehicle that owns it earlier this month. The action follows a string of setbacks relating to its development and the collapse of a planned sale.
The development was previously owned by PMB Holdings, the property company of real estate veteran and theatre impresario Peter Beckwith. Beckwith is the father of socialite and ‘90s "it girl" Tamara Beckwith.
The development comprises the 110-bed Premier Inn Hub hotel, 11 retail units and 16 apartments. One of the lenders to the scheme estimated that, when completed, it would be worth more than £100M.
Receivers from Fraser Real Estate were appointed to take over the scheme last November. In August an administrator from RBW Restructuring was appointed to Berwick Street Securities, the SPV that owned it.
Before going sour, the scheme was supposed to be a rare opportunity to create a new development in the heart of London’s trendy Soho. In 2012 PMB was selected as the preferred bidder by Westminster Council to redevelop the historic fruit market on Berwick Street.
Berwick Street adjoins some of Soho’s seedier thoroughfares known for their strip joints and prostitution. When it was selected, PMB said it would look to improve the street while retaining and tapping into its edgy vibe. The street features on the cover of the Oasis album (What’s The Story) Morning Glory, and it is synonymous with both record and fabric shops.
PMB beat completion from major local landlords Soho Estates and Shaftesbury as well as global investor Nuveen to buy the site.
Plans for the mixed-use scheme were approved in 2015, but the construction phase of the project on the complex site was beset by problems, including leaking roofs and groundwork issues. The scheme was built underneath a residential tower block, and both residents and traders in the food market that operate from the street complained about noise and dust produced by the site.
The scheme was due for completion in October 2018, but it overran. Before it was completed, contractor Interserve went into administration, causing further delays.
All the delays had a significant impact on PMB. In August 2017, it agreed a deal to sell the scheme to Shaftesbury for £38M when it reached completion. But because the completion was delayed, that deal fell away, putting the development in financial difficulty.
Accounts for Berwick Street Securities for the year ending January 2020, which were filed in April 2021, said that the loan facilities secured against the scheme expired in March and April 2020, and were not extended.
There were two loans secured against the development: a £28.5M senior loan provided by Close Brothers and a £19M mezzanine loan provided by a specialist development lender called Beaufort Ventures. The company accounts showed it had assets valued at £34M against total liabilities of £49M.
When the loans were not extended, receivers were appointed in November 2020, giving control of the scheme to its lenders.
The 110-bed Premier Inn hotel opened in April this year, but a walk around the scheme showed that the retail element has not fared well. One of the 12 units is leased to grocery retailer Co-Op and is operational, but the other 11 units are all unlet with boarded-up windows covered in graffiti and fly posters. There was no information on the site about leasing agents for the units, as is common on new developments. The problems of the scheme predate the coronavirus pandemic, but the period since March 2020 has not been a good time to lease West End residential units, with footfall in the district a fraction of its normal level due to lockdowns keeping away tourists and office workers.
There is no public information about the pace of residential sales, but a poster on the scheme said units were being sold via brokers CBRE and GLP. Of the apartments, 12 are full market price and four are affordable units.
If the scheme is put up for sale, the market will watch with interest the level of appetite for a site in the centre of one of London’s most sought after retail destinations, particularly with the future of West End retail and tourism up in the air.
Beckwith came to prominence in real estate after building up a listed company, London & Edinburgh Trust, in the 1980s alongside his brother, Sir John Beckwith, before selling it in 1990 just before the market crashed. He is also one of the founders of the Ambassadors Theatre Group, which was sold to a private equity firm for £250M in 2013.
PMB did not respond to a request for comment. Fraser Real Estate and RWB did not respond to a request for comment on the future strategy for the site.
