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October 19, 2012 6:59 pm
Cork Street is to London’s art world what Savile Row is to tailors or Hatton Garden to diamond dealers. For nearly a century, the Mayfair street that is home to 22 commercial galleries and sits within striking distance of the Royal Academy of Arts has been the heart of London’s art dealing scene, nurturing the careers of the likes of Francis Bacon, Paul Klee and Lucian Freud.
But now two multimillion pound property developments are threatening the future of the galleries. In August, the £90m redevelopment of an 83,000 sq ft building into luxury apartments by property developers Native Land was announced, and seven galleries – including the street’s oldest, the Mayor Gallery, which has been there since 1925 – were told their leases will not be renewed next year.
Then last month, plans were announced by landowner the Pollen Estate to redevelop a separate site on Cork Street, home to a further four art galleries. A decision on both proposals is expected to be made by Westminster Council early next year.
Both claim the new schemes will include retail and gallery space when complete in 2016. But even if the galleries are re-housed, they fear they won’t be able to afford the rents or compete with fashion houses and luxury goods businesses for the spaces. If that is the case, then what is Cork Street without its art? “Artists, curators and collectors love to visit the street and it would be sad to see it turn into another high street,” says Matthew Flowers, who co-owns Flowers Gallery, which has been on Cork Street since 2000. “Although there is still uncertainty as to the nature of the development, the affected galleries will need to move out to facilitate the refurbishment. There is nothing stopping them from moving back in when complete, but if they do not, it seems inevitable that Cork Street will no longer be synonymous with ‘art’.”
The conversion from commercial to residential is a trend gaining pace across Mayfair and elsewhere in central London as landlords realise there are higher profits in renting out flats or houses than offices or retail space. Ben Babington, director of residential at Jackson-Stops and Staff’s Mayfair branch, says his office is dealing with 11 conversion projects, compared with two last year. One current project is 5 The Breams, an office building near Fleet Street being converted to seven flats starting at £699,950, of which four sold soon after launch.
In prime Mayfair locations near Grosvenor and Berkeley Squares, residential properties command £3,000 per sq ft and prices have risen by 150 per cent in the past six years, says Savills. Equivalent commercial properties would sell for £800-£1,200 per sq ft.
While Mayfair was previously considered the “poor cousin” to Belgravia or Knightsbridge, “a combination of international safe haven money, the regeneration of areas such as Mount Street and the conversion of some commercial buildings have driven demand, putting prices in some areas on a par with the super-prime areas,” says Adrian Owen, head of residential at Montagu Evans, which is selling a former ad agency/architect’s office in Shepherd Street with planning for a private gated courtyard development of four mews houses – with parking for 12 cars. The guide price is £15m.
The financial imperative for switching to residential may be compelling, but there is also a historical justification. Before the second world war Mayfair was residential, so by converting its buildings – particularly its Grade II-listed mansions – back to homes, developers are returning the buildings to their original use.
“As a result of heavy bombing over the City, businesses moved into their owners’ residences in Mayfair. The City of Westminster, along with the Grosvenor Estates, granted 50-year temporary office consents to allow those conversions,” says Richard Cutt, a partner at Knight Frank.
Peter Wetherell is director at Wetherell, a Mayfair sales and letting agency that acts for Grosvenor’s Mayfair estate and has sold more than 100 period buildings since 1990 that have been restored from commercial to residential use. On its books for £17.5m is Five Aldford Street, a six-storey building with planning permission to be turned into a spectacular home.
“These buildings were built as fine homes and are just not suitable for the needs of many of today’s commercial tenants,” says Wetherell.
While some may feel that by turning existing commercial spaces such as art galleries into high-end homes an area loses its identity and charm, others argue that the arrival of rich residents in largely commercial streets has a positive effect.
“Cork Street, which was always a second-rate area of Mayfair, has been overrun by small galleries and what they need is a few homes so that these residents can feed their businesses. As clubs and bars have emerged nearby, it has become a desirable place for young, upwardly mobile buyers and people are starting to look at Mayfair in a different light,” says central London buying agent Robert Bailey.
In London as a whole, 82 per cent of applications for commercial to residential conversions in the past 10 years were given consent, says Malcolm Chumbley, head of UK development agency at Cluttons. “The objection is often what effect residential property will have on an area that has built an identity around a particular service sector,” he says, “but there are many incidences where it can have a positive impact, for example in the City and Canary Wharf.”
Robert Barham, senior partner at Pemberton Greenish, a law firm that acts for some of central London’s big landowners says: “Estates such as Cadogan or [the Howard] de Walden take a very long-term view. Their plan for the area encourages certain types of retail and they want to keep the mix, even if that means not maximising short-term returns.”
Special Policy Areas: London’s cultural heritage
While the conversion of commercial buildings in some parts of Mayfair has been welcomed, the development schemes on Cork Street face strong opposition – a Save Cork Street campaign has been launched and an e-petition with more than 11,000 signatures has been presented to Westminster Council in protest, writes Sally Raikes. The campaign wants Cork Street to be made a Special Policy Area (SPA) to safeguard it as a hub for independent art dealers. SPAs are protected from the arrival of businesses not in keeping with the character of an area.
Existing SPAs include London’s Harley Street and its surrounding streets, where medical clinics have operated since the 19th century; Savile Row, home to British tailors for more than 150 years; and the private members’ clubs, art galleries and specialist shops of St James’s Street and its neighbouring streets.
If Cork Street were to be granted an SPA, however, the process could take up to two years. One way to protect the street’s art dealers more quickly could be to extend St James’s SPA north of Piccadilly.
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