Housing correspondent BARRATT HOLMES on how Criterion Capital have scooped a cut-price bargain on two landmark Croydon buildings, as they plan to deliver the country’s largest office-to-resi development
Going cheap: Apollo and Lunar House cost £99m when bought in 2015. This year, they’ve been sold on for just £30m
Croydon’s 1960s landmark buildings Apollo House and Lunar House have been sold for almost £70million less than a developer paid for them 10 years ago, in what is, even by Croydon standards, an eye-raising property deal.
And at the centre of this deal is Asif Aziz, the billionaire property developer described by The Times, no less, as “Britain’s meanest landlord”, who has been at the centre of controversies over Oxford Street gift shops and the cult Prince of Wales Cinema at Leicester Square.
Apollo House and Lunar House on Wellesley Road were bought for £99million in 2015 by Singaporean investor Ho Bee Land. For almost a decade, Ho Bee Land sat on their investment, quietly banking the regular rental payments from the Home Office, waiting their moment.
Once the civil servants who worked in the buildings moved to Ruskin Square, Ho Bee Land brought forward office-to-resi redevelopment plans to turn the buildings into nearly 600 flats.
But the Singaporeans have suddenly sold up for just £30million. They had only been granted planning consent in April this year.
Originally, Ho Bee Land were asking for £60million, but accepted less for a quick sale. A trade magazine euphemistically reported the purchase price as “tak[ing] advantage of price dislocation in the capital”.
Criterion Capital, the property business formed by Aziz, is moving into Croydon. It could be a bumpy ride.
Coming to Croydon: ‘Mr West End’, Asif Aziz, has also been called ‘Britain’s meanest landlord’
Criterion has a portfolio of prime real estate across London and the south-east reported as being worth about £6billion.
Aziz, now living as a tax exile in Abu Dhabi, did his first property deals when in his teens, converting storage space above a couple of shops in Deptford into flats. Tapping into the rapidly rising demand for residential accommodation, Aziz has made a fortune.
Aziz is sometimes called “Mr West End”, as his companies own vast chunks of the area around Piccadilly, including the Trocadero.
He has been criticised for using companies registered off-shore in the Isle of Man to buy properties in London, especially pubs, before closing them, usually to turn into flats. Aziz’s Criterion has also targeted other community buildings for redevelopment into “luxury apartments”.
There are no pubs at risk in the purchase of 22-storey Apollo and 20-storey Lunar House, the former immigration and visa centre at 36 and 40 Wellesley Road.
Using Permitted Development, or PD, planning rules, Criterion has already implemented the planning consent obtained by Ho Bee Land and will look to increase the number of flats across the site in what is thought to be the country’s largest office-to-resi development, eclipsing the 404-flat Delta Point scheme just up the road.
The Apollo and Lunar House homes could be worth £300million once completed.
Croydon Council approved two prior notifications for the scheme, so is unlikely to oppose the scheme brought forward provided criteria such as fire safety, contamination and transport impacts all check out.
Big profits: Apollo and Lunar House, built in the 1960s, could be turned into 600 flats
Apollo House and Lunar House comprised 441,797 sq ft of office accommodation, making up a large chunk of more than 1million sq ft of office space which is about to be lost in Croydon as PD is used to convert office blocks to residential.
The previous Labour council administration put a block on town centre PD schemes, with the flats in converted offices being described as “rabbit hutches” and “the slums of the future” by some councillors. It is reckoned that, in total, 1,500 residential units are being planned under PD rules for Croydon.
These include offices above the Whitgift Centre, whenever Westfield get round to submitting their planning application, and Mott Macdonald House, with plans for another 124 flats.
Read more: Planning consent granted for 580 flats in ‘space-age’ Croydon
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Tax exile in Abu Dhabi, off-shore companies based in the Isle of Man, nothing to see here…
“Nothing to see here”….or so the greedy property developers would like us to believe….?!
Are AA bad initials for property developers to have?
Now Croydon has Asif Aziz muscling in and building more “slums of tomorrow” in Croydon, but we already have heritage assets like the Leslie Arms pub being allowed to rot by Anwar Ansari, another “property developer” taking Croydon for a ride !
Maybe they’re trying to make sure they’re listed first in the Yellow Pages… 😆
Even though Ho Bee lost money …i still think they were smart because they no longer have to deal with the fuckwits at Croydon Council. The executives probably went to Croydon High Street and said “it doesnt matter if we lose money, let’s get the fuck outta here ASAP”.
We all know Westfield are gonna dump at some point too. It is glaringly obvious.
Selling to Aziz means we will probably get 600 hmos, with American Candy stores downstairs.
So the previous speculators are prepared to cut their losses and take a huge loss just to get out with something. Tells you how well the profitability of speculation is going on in Croydon.
These properties were built over 50 years ago as office developments. We have seen the issue with high density new build flats in Croydon. So a bottom line merchant has moved in who believes he can squeeze a good return out of all this in conversion of such unsuitable structures. I hear horror stories about smaller scale conversions in Croydon already. Hopefully this merchant will find the property market is just not the same as when he first started and the soft options are just not possible anymore.
I hope the only inevitable result of the slums will be avoided as he even realises (as had the previous developer) that the conversion of these units is simply not viable and he will have to look at an alternative means to generate a return or more likely offset losses as the blighting of Croydon continues into the long term future.
Nobody is convinced that Aziz will build a good housing development, but the worst existing one, Delta Point has set the bar very low.
Why do we recognise tax havens? No, really, why ? The government may crow about their income from high-rate taxpayers, the new mansion tax etc. etc., but the built-in tax loopholes make these insignificant when exploited by the really rich. Why do we tolerate this? Come on, Rachel, explain this to ordinary taxpayers.
You wonder what effect all these new flats will have on rents in Croydon if they do in fact materialise.
Criterion won’t be able to hold out for the same rents which the tenants of Ten Degrees and Enclave are currently paying. Indeed they may find that they can only rent them for the amounts permitted by local housing allowances under the universal credit rules.
Hopefully Croydon Council will derive some benefit from the development (if it happens) from increased receipts of council tax and the fees which the landlords will have to pay Croydon Council under its proposed selective licensing scheme.
The current state of the old Nestlé offices suggest that there is nervousness about the profitability of developments like this. We may find that Criterion has only purchased the two blocks with a view to selling them on at a profit. It will be interesting to see whether there is any activity in the buildings next year – and if the activity extends beyond gutting the buildings to take them off the business rates list.
I hope that I am proved wrong but I fear that these blocks will remain empty for some time and will only be developed when there is an improvement in the economy and we may be waiting some time for that! I cannot find an entry in the Valuation Office Agency’s list of business properties for St George’s House, the old Nestlé building, so presumably that property has now been removed from the register and the owners are not paying business rates.
Again, I hope that I am proved wrong but we may find that the windows are removed from Lunar House and Apollo House next! Oh dear! Both blocks were originally developed by Harry Hyams of Centre Point fame. Hopefully they will not remain empty as long as Centre Point!!
One of the priorities of Croydon leadership in the future (because it won’t happen under Perry) is to rid itself of all these rotten property developers, otherwise it will never get anywhere. They circle like sharks, offer nothing but damage and profit from it.
Time for planning laws to have an overhaul but also time to have the powers to prevent any and all developments not in the public interest locally and refer them not for delegated decision but to an independent panal of actual residents with a power of veto