Land your property deal now
Property veteran Harvey Soning says the profitable deals are back.
Sold. For £155m: Harvey Soning advised the £155m sale of Land Securities’ Portman House on Oxford Street
London remains the finest property market in the world, says Harvey Soning. The boss of James Andrew International, Mr Soning has spent five decades in the real estate industry.
While acknowledging that this recession is worse than the previous three downturns he has survived, the 64 year-old believes fortunes can nonetheless be made. “There is still a substantial amount of demand for commercial investment in the City,” he says. “It is still the finest property market in the world because of our full repairing and insuring leases, long-term leases, difficult planning permission and, of course, the pound against the euro, dollar and other currencies. It is very cheap for overseas investors to buy here. Some say they may have been waiting for this opportunity.”
Mr Soning would know. Earlier this year he advised a Middle Eastern sovereign fund on the £155m landmark purchase of Land Securities’ Portman House on the north side of Oxford Street — believed to be the largest deal in the West End this year. James Andrew has invested more than £0.25bn for this fund.
“Sovereign funds are there to take advantage of the drop in prices of the London property market,” says Mr Soning. “It was certainly a landmark deal and demonstrates the willingness of the fund to invest not only in the City, where they have previously invested, but also in the West End.” It helped push second-quarter West End investment figures above first-quarter figures.
The transaction was also significant from a personal perspective for Mr Soning, whose father and grandfather owned a shop 60 years ago on the same site in Portman Square. “They sold it to Land Securities so it is kind of a full circle. It was nice to work on.”
Dealmaker: Harvey Soning
Entering the property world at the age of 14, Mr Soning grew up with heavyweights Gerald Ronson, Elliott Bernerd, Tony Gibbon and Stuart Lipton, whom he counts among his close friends. “We’re all mates. We speak to each other all the time.” So, what is the mood among his peers? Still somber. “This is because of the economy and the huge amount of property debt that has to be realised over the next five years — billions upon billions of refinancing needs to take place.
He adds: “There is the uncertainty of the election next year — there is always uncertainty before an election. Whichever party wins, there will be some very hard times for the country. This is a long haul. This is like our grandfathers used to know, not the young people of today: boom, boom, boom, bust, small bust, boom, boom and boom,” adds the father-of-four who, as he puts it, “has lived through the 1974 recession, the ‘mini-one’ in 1986 and the ‘big one’ in the early 90s. “That was horrific for the real estate business but this is an earthquake that we are living through now. This is the biggest since 1930.”
He reflects: “It was obvious that the party could not go on forever. A lot of us foresaw it — Nick Leslau foresaw it, Gerald Ronson was preaching it three years ago. There are always tears at the end of the party and now we have floods.”
Yet Mr Soning remains upbeat, confident that this recession will give rise to new opportunities. “There is a long way to go but there are emerging businesses. It’s almost like a forest fire. It has burnt out the old and the new green starts rising.
“I think there will be very substantial fortunes made in real estate over the next ten years, especially for housing. There will be an explosion in demand and a lot of money will be made inland, particularly in the south of England.
“Entrepreneurs will spring out of this recession as they have done in previous recessions.”
Mr Soning founded James Andrew in the 1974 recession. A former junior at Peachy Property Corporation, he was working at Guardian Properties, which was badly hit. “It was a time where every other shop in Bond Street had a ‘to-let’ sign on it.” He decided to set up on his own, forming James Andrew, named after his two eldest sons. Andrew has since joined him in the business. “I decided I didn’t want to work for anyone else. I borrowed an office and I got down to work.” His first big customer was Sir Martin Sorrell, the chief executive of WPP, the world’s largest advertising group, who remains a client.
Other clients include restaurateur Richard Caring, owner of The Ivy (Mr Soning facilitated the £130m purchase of Wentworth Golf for him); Gerald Ronson’s Heron International; Elliot Bernerd’s Chelsfield Partners; Lloyd Dorfman’s Travelex; Alliance & Leicester; De Beers; RBS; and British Land.
Has he been surprised by some of the victims of the recession, particularly those on the high street? “Most of them were accidents waiting to happen. It’s all management, management, management. The landlords are supporting the well-run businesses whereas the badly-run businesses have gone to the wall — that’s life. It’s survival of the fittest.”
He acknowledges that landlords have a responsibility to reduce their rents for tenants. “This isn’t an issue for principal shopping streets but landlords should keep their rents down. They have to keep their tenants because the worst thing you can have is gaps in a row of shops. They have to help their tenants out.”
In addition to James Andrew, Mr Soning has a 50 per cent interest in the property management business James Andrew RSW, which manages about £1bn of assets and 1.2 million square feet of commercial land. He owns The Templewood Group, whose subsidiaries specialise in cleaning for retail premises, security for high end retail customers and blue chip offices, and explosives and drug detection using sniffer dog teams at the O2 centre and Canary Wharf.
The grandfather-of-eleven has no intention of slowing down. He sits on the development board of the Natural History Museum, where he has been involved in the Darwin facility. He is the ex-chair and a trustee of Youth Aliyah, and has been involved with CST since its inception.
Would he still advise property as a career? “Yes. Everyone has to have somewhere to live, work, store goods and sell things. We are a tiny island and they ain’t making any more land here. Property is a great business if you are prepared to work hard and walk. If you walk, you meet people. You don’t bump into people in taxis.”