The aristocratic owners of London’s great estates – Grosvenor, Cadogan and more – shaped the city as we know it. But after centuries of slumber and a reversal of fortune, they need new strategies in order to survive, says Josh Spero
I'd wager there's not much that connects the mad, misused 17th-century heiress Mary Davies and Lindsay Lohan, 21st-century starlet manqu’e and possessor of the most remarkably sculpted lips in Christendom. But they do find themselves at either end of the same story, which is the story of the great estates of London, the story of the places where we live, work, love, wander and wonder.
If you count the Crown Estate as the oldest (established 1066), they are our cityscape from time immemorial. And as the Crown Estate heads towards its first millennium, closely followed by the City of London Corporation (1067); as medieval estates like the duchies of Cornwall and Lancaster and the companies of Mercers and Leathersellers endure; as the familiar great estates of Portman, Bedford, Grosvenor, Howard de Walden and Cadogan count up their centuries; and as new great estates in Soho, Earls Court and Canary Wharf tick over into decades, their strains and their successes are becoming clear. In an era where they may seem anachronistic or even feudal, how they are planning to prolong their hold is what I wanted to see.
The origins of the familiar great estates lie less in a hold, though, and more in a grab. When Henry VIII dissolved the monasteries and deprived the church of its property, he gained what we would today call a land bank, but instead of populating his estate with blocks of buy-to-let flats above a mini-Sainsbury's, he and his successors distributed parcels of it to loyal servants. These parcels, lying outside the commercial hub of the City of London and the royal hub of the City of Westminster, were not really London at all: Belgravia was marshes and orchards.
Once individual estates had come together, most often by an advantageous marriage such as Sir Thomas Grosvenor's to Mary Davies, heiress to the manor of Ebury, the aristocrats did what they knew and ran them as they ran their rural estates, says Sir Simon Jenkins, chairman of the National Trust and author of Landlords to London, a classic 1975 study of the great estates.
They developed the land for housing and offered long leases to 'moneyed tenants', he tells me, since this ensured 'a virtuous circle of interest': respectable occupiers who wouldn't get mud on the rugs, a steady stream of income and the eventual reversion of the lease to the freeholders so they could sell it again. And even back then today's London was visible, in essence at least: 'The point of my book was this created the most extraordinary European city of these planned housing estates which you didn't get elsewhere, because most places had defensive walls round them. We had land that could spread.'
What Sir Simon highlights is an alternative way of looking at London. The great estates define London not as political or economic or demographic units but rather as the embodiment of intentions: an animating intelligence, a plan, has seen them from swamps and hedges to stucco and hedge funds.
Sometimes the owners decided on development: in 1719 the Earl and Countess of Oxford had John Prince design Cavendish Square and its radiating streets on what would later be known as the Howard de Walden Estate. At other times ambitious architects saw the potential utility and riches of the land as when, in the 1770s, Henry Holland built Hans Town on 89 acres of Cadogan land. (These details and many others in this article come from the excellent book Great Estates, published by New London Architecture.)
Whoever provoked it, some of England's best planners, architects and landscape gardeners were engaged to turn these fields into flourishing communities. Indeed, communities they were: it was not just terraces of houses which were built, but also schools, chapels, markets, gardens and (eventually) commercial buildings.
The great estates have not remained constant but have oscillated in prestige and extent; some have, of course, shrunk. Much was sold off between the wars, when Victorian 99-year leases came to an end and high taxes were feared. Mark de Rivaz, steward — CEO — of the Bedford Estates, which owns large chunks of Bloomsbury, still regrets the 1918 sale of Covent Garden. Sitting in a boardroom-cum-conservatory across from the British Museum — formerly Bedford land — de Rivaz does not entirely admire his predecessors.
With a pained sigh, he says: 'There are always things with hindsight you think, “Oh God, that was a crazy thing to do.”' Back then, Covent Garden went for ’2 million (’100 million in 2014 money); current owner Capco valued it, in its last annual report, at almost ’1.2 billion.
Shrinkage is not itself a problem, if you keep your most profitable land and shed the troublesome, costly parts. But there is a type of shrinkage plaguing the great estates which is involuntary. In 1993, building on previous laws, the government passed the Leasehold Reform, Housing and Urban Development Act, which gives leaseholders the right to buy their freehold (together with their neighbours if they are in a block of flats).
There are certain conditions to be satisfied — your lease must have been granted for at least 21 years and you must have owned the property for over two years — but this is plainly damaging to the estates' territorial integrity. John Stephenson, senior partner at law firm Bircham Dyson Bell, uses a striking metaphor for this piecemeal consumption: 'Have you ever seen a diagram of the difference between a smoker's lung and a healthy lung?'
Initially, the great estates tried to resist, says Stephenson — and not always graciously. 'They all hated it, obviously, because it's confiscatory legislation, it's compulsory purchase… Some of them were very angry, but their attitude differed according to who they were. For instance, the Grosvenor Estate, as they always do, behaved in a very dignified manner.' They understood they had to live with enfranchisement. The Cadogan Estate, on the other hand, 'had a much stronger negative attitude. They would do their very best to defeat claims on whatever technicality they could.'
Their reputation soured at the time, but has since certainly recovered. Stephenson sees it less as wilfulness and more a desire to protect the estate, though it hasn't worked: 60 per cent of Cadogan's residential buildings are now in private hands.
Hugh Seaborn, former CEO of the Portman Estate and current CEO of the 93 acres of the Cadogan Estate, is quite open about this: 'You know, we no longer own much of Chelsea because the houses have all been enfranchised. Now we can say we own Sloane Street and Sloane Square and Duke of York Square, but going beyond that it's much greyer.' Or at least much redder, thanks to Cadogan's Pont Street Dutch red-brick architecture. They do also add to their stock: in July, Cadogan bought nearly 200 residential properties in South Kensington and Earls Court from two former great estates.
Seaborn says not all residential units will be lost to the estates: if the residents of a block of flats can't collectively buy their freehold whether because of disunity or insufficient funds, individuals may be able to purchase a 90-year lease extension which will eventually revert to the estate. (As in Monopoly, great estates often try to buy up spare flats to prevent an expensive unity.) It is a little disingenuous, however, when he says that 'rather than convert [offices on the estate] to a much higher-value residential [class], we hold on to them because people come here and work and it creates life and vitality.'
I can't believe the threat of enfranchisement doesn't play some role in this decision, and Seaborn implicitly confirms this when he talks about the unappealing residential choice the great estates face: they can offer twelve-month tenancies ('quite challenging' because they are unremunerative) or long leases, which lead to enfranchisement. What the great estates are no longer, says Seaborn, is cohesive. But as a glossy front door on Sloane Gardens closed, some elegant sash windows opened.
Walking past La Fromagerie on Moxon Street, with its cheese cave and dear biscuits, Simon Baynham of de Walden and I come to a car park, listlessly populated with motors. This was sold by de Walden to Westminster City Council in 1966, but the council never put up the promised school and it has lain grey and largely vacant since, except for farmers' markets.
The development potential of almost an acre of land in W1 cries out, but wrangles and delays meant it took over two years to select a buyer for the ’60 million sale. In the end, de Walden, whose land surrounds 80 per cent of the site, lost out to a pair of developers with a ’250 million plan for a residential and commercial project.
The fact that de Walden could bid is partly the upside of leasehold enfranchisement. While it stole away the great estates' land, it also brought torrents of cash sluicing into their bank accounts, and as a result some estates are buying more property, as Baynham explains to me on a meander around Marylebone, de Walden's 92-acre heartland.
As with the Moxon Street car park, obtaining sites isn't always easy: for every property they get, there are others they put offers on but were outbid for, refusing to match the inflated prices bumptious buyers were brandishing. There is no way, he says, all these properties will make their new owners a profit, and he has seen some return to market.
The rude shock of enfranchisement demanded a dynamic response. The great estates had been somnolent rentiers until then, although Toby Shannon, CEO of de Walden, puts it more politely: 'All the London landlords before leasehold enfranchisement were essentially ground landlords. They would sit and collect the rent, they weren't particularly active; yes, they would police the estate and make sure people carried our repairs, but they weren't thinking any further than that. Then, when leases expired, they could sell the property for a premium and they generated their income from this recycling of selling leases time and time again.'
The great estates had in places fallen into disrepair because of this slumbering security, so the enfranchisement cash was badly needed, says Simon Baynham: 'I think all of the London estates had to up their game; you know, we had beautiful buildings on the outside but all of us had buildings that weren't up to requirements.'
Bill Moore, CEO of the Portman Estate, 110 acres between Oxford Street, Edgware Road and the Marylebone Road, concedes the same: 'There were crumbling buildings, there were places that needed refurbishment, there were empty buildings, and I think we had let a lot of our buildings on long leases.' Now these long leases were being cut short by enfranchisement, removing another of the obstacles to development.
And development is what they're doing. Just as their forebears established new communities with their own facilities and characters, today's great estates are operating along similar lines, though it is now called placemaking. This placemaking is enabled by the astonishing levels of money the estates have come into: Moore says that over the next five years Portman will put ’150 million into refurbishing the estate; de Walden is investing ’200 million; and Cadogan has ’25 million earmarked for Sloane Street public-realm works.
The great estates, being lately run by discreet aristocrats, have tended to shy away from trumpeting their brands, but brands are exactly what placemaking needs: an area, regenerated, needs an identity — and this is where Lindsay Lohan comes in.
In 1889, the Manchester Square Fire Station opened on Chiltern Street in Marylebone. It was one of London's first, local government having realised that fires in private properties were a public nuisance. By 2005, fires had evidently become gentle enough for the station to close. It became an exhibition space for artists and, in 2014, the Chiltern Firehouse, a restaurant and hotel run by Andr’ Balazs, with Nuno Mendes at the pass.
Today, instead of responding to alarms, the Chiltern Firehouse is now ringing a few bells of its own, mainly among the paparazzi who are domiciled on its front step, waiting to snap the endless queue of celebrities turning up for their crab doughnuts, and among readers of the Evening Standard, who get a fill of who has turned up. The answer, daily, is Lindsay Lohan (and her lips).
The Portman Estate is probably feeling very pleased with itself. It owns Chiltern Street and was responsible for bringing in Balazs, along with other 'curated' tenants, to create a new neighbourhood. Under a marketing-speak slogan ('Individually Together'), it has gathered independent retailers ranging from fashion lines like Sunspel and Archer Adams to beauty spots which offer laser treatments and hair teasing to caf’s where you can be relieved of excess pounds for your espresso.
Bill Moore of Portman explains that, since 2000, 'a change of viscount, a change of chairman and the first appointment of a chief executive' have brought Portman up to speed from a slightly tardy position, enabling it to think forward to grand projects, which also include cultivating 'Portman Village' (Seymour Place and New Quebec Street) as a discrete destination.
Cadogan would point to Duke of York Square and Grosvenor to Elizabeth Street as examples of their placemaking activity. The CEOs of the great estates understand the estates as a whole, but they are shown to consumers and renters as fashionable quarters.
Chiltern Street was a recent opportunity for Portman; it took back direct control in 2009 after 30-year leases had expired and began to design it as a 'bespoke area'. But it is important to remember that creating Chiltern Street was not in itself the end (or rather the only end), but the means. Philip Morris, associate director of Portman, lays equal stress on 'maintain[ing] the income for the beneficiaries and the trustees of the estate' as he does on letting the estate evolve for its own sake. Placemaking and moneymaking are not unconnected.
The classic model of great-estate placemaking, which was referenced in most of my conversations, was de Walden's overhaul of Marylebone High Street. While the street might today seem largely harmonious, its creation was a struggle, says Peter Barton, de Walden's chairman: 'Although you're grand landlord of virtually the whole street, we only had control of about 40 per cent.'
’Probably less than that,' says CEO Toby Shannon. And the rest are on 99- or 999-year leases which pay ancient rates? 'Well, they pay for the postage.'
Today de Walden has the economic interest in two-thirds of the street, which explains the preponderance of chic, unique retailers and the unhappy substratum of a few tatty shops. De Walden's next placemaking project is to help Harley Street and environs capitalise on 'medical tourism', a booming billion-pound industry; this will involve shifting its reputation, which is dominated by the small number of cosmetic surgeons who practise there, to one of serious clinical excellence.
Not owning the whole of a street or a square is a disastrous impediment to placemaking. The Bedford Estates do not have all four sides of Tavistock Square or Russell Square, which I describe to CEO Mark de Rivaz at first as 'challenging' locations, then (more honestly) as 'shabby'. While he defends the estate and describes the improvement of 'cheap and not very cheerful' hotels on Gower Street, de Rivaz does say they are at a disadvantage: 'We can't do things on the scale that Cadogan and Howard de Walden and Portman can do, simply because of the lack of contiguous ownerships.'
Bedford is also split by University College London and the British Museum, which means getting a scheme together for a complete street or neighbourhood is almost impossible. While Bedford are working with Camden Council on public-realm schemes and can regenerate some parts of the estate, their future does not seem to contain the same promise for placemaking as the other estates.
You can't placemake where there are no people either. Well, you can try, but it's hard to make a community without the commune, and the precincts of Mayfair and Chelsea in particular now have a reputation for a lack of houselights at night, bought by wealthy foreigners who are resident for one hectic month a year.
The great estates are sensitive to this, says John Stephenson of Bircham Dyson Bell: 'They hate the fact that so many of these flats are unoccupied. I was talking to a top executive of Grosvenor (or at least he was at the time) and he was saying, “I'd really love to make Belgravia a thriving proper community again but the prices are so high that ordinary shopkeepers and people like that can't afford to buy, so it's very hard.”'
Around the time that the Chiltern Firehouse launched on Portman's patch, Chris Corbin and Jeremy King, the brains behind the Wolseley and the Delaunay, opened Viennese caf’ Fischer's on Marylebone High Street — de Walden's land. It did not attract nearly as much publicity as the Firehouse, but it didn't matter either: as far as Marylebone High Street is concerned, the place has been made.
Just a flesh wound
Ed Miliband wants to make a very particular place his own, come May 2015. The great estates, unsurprisingly, hope he doesn't take out a long lease on 10 Downing Street as his tax policies are one of the severe threats facing them; another is popular resentment at how London relates to Britain; and a further one, largely beyond Miliband's control, is London's global position.
The 'mansion tax', which Labour supports, is implicitly a weapon meant for the great estates: to attack prime property in London is to attack Westminster and Kensington & Chelsea, the nicer parts of which are held by the estates. 'Let's face it,' says Peter Barton. 'Wealthy family-owned estates are not perhaps the pin-ups among left-wing governments.' Rent controls, also mooted by Miliband, are 'a challenge, a risk', according to Mark de Rivaz.
Hugh Seaborn understands why people might want to tax large houses in London, whose prices have soared since 2008: 'London's prospered through this dreadful crisis… In many respects, people may feel that the part of the crisis originated from London.' His worry is that politicians will listen to this 'resentment'. This is not to say that some redressing of the balance isn't appropriate, he adds: we must start 'getting away from this idea that a Russian oligarch can pay the same council tax for a ’50 million house as somebody with a ’50,000 house in the north of Wales'.
Not that the Coalition government has exactly been sweet on the great estates: stamp duty has gone up; the Annual Tax on Enveloped Dwellings — aimed at houses owned by companies — initially included the great estates but, thanks to a larger industry body, they lobbied their way out of it.
But perhaps these are all glancing blows. As Hugh Seaborn points out, 'The most dramatic regulation we've had, the most dramatic impact we've had are around the Leasehold Reform Acts. We've adapted to that — our business models have changed.' In other words, do your worst, Miliband: if the great estates can survive enfranchisement, they can survive your five years in power.
The greater problem of London's global position is not one Hugh Seaborn or Peter Barton or Earl Cadogan or even the Duke of Westminster can deal with, almost to the point where it is futile to discuss it. Let the macro currents wash where they may, let Europe rearrange its industries as it chooses: the great estates have seen the Black Death, the Reformation, the Civil War, the Blitz and New Labour. They're still here.
One of the best ways to understand the strengths of the great estates, to see what will make them endure, is to see how newer great estates are copying them. Take perhaps the most unlikely of them, Soho Estates, founded on smut and smarts. Whereas most people who ran nightclubs and strip joints in the Fifties and Sixties probably put their profits into their veins, Paul Raymond took advantage of a depressed market to buy up historic buildings he could walk to from his office.
Today, Soho Estates covers a significant portion of the beating heart (throbbing crotch?) of London and is run by John James, Raymond's son-in-law, who acts on behalf of his daughters, Fawn and India Rose James, Raymond's heirs.
It is not like other great estates in that Raymond did not develop the whole area himself, but otherwise it shares similarities and reveals learned behaviour. There is the clustered nature of the buildings and the development this contiguity allows; the unique atmosphere of the 'village'; the primary acquisition in one man's lifetime; the way the estate shuffles the usage of buildings to bring together common functions (see de Walden and how it is disentangling medical and residential usages); the maintenance of owner-control by not borrowing heavily from banks. 'We follow the same rules,' says James, but some better ones too: they don't offer leasehold interests which will lead to enfranchisement.
A beneficent paternalism, gently settled over self-interest, is a common factor too. John James describes how during and after the recession they gave some businesses on their land extra time or more favourable terms for their rents: 'It would be imprudent to send the bailiffs into an entire street. You have to help businesses survive in a recessionary time with the view that the recession will come to an end.'
Hugh Seaborn illustrates another example. Some Cadogan residents who had bought their freeholds wanted the communal garden to be handed over to them too. Five years later, when neighbours were squabbling about who had to mow the lawn or whose turn it was to prune the petunias, they asked Cadogan to take it back. And did they? 'We did, yes.' Even though it was going to cost them money to do it, the harmony of the area was more important.
This paternalism can also extend into micromanaging: as John Stephenson says, he's 'almost tempted in certain cases like the case of Grosvenor to say “enlightened despotism” because they were very politely dictatorial'. (They are now less controlling, he adds.)
The other key aspect newer great estates have understood from the older ones is exactly that: the importance of long-term thinking. John James says his short-term is twenty years, his medium-term 50, his long-term 80; he doesn't think in decades but in grandchildren. Consider the great estates' owners' regnal numbers: we are on the 6th Duke of Westminster, the 8th Earl Cadogan, the 10th Baron Howard de Walden (actually a Baroness), the 10th Viscount Portman and the 15th Duke of Bedford. These are families planning for their next century, not their next quarter.
As is well-established with family businesses, the fact that they need to look so far into the future benefits not just the business — residents and bottom lines — but also society. In the case of the Portman Estate, says Bill Moore, they are keen to work with the council to develop long-term strategies for Westminster's public realm: making the streets better is a decade-long investment, not an immediate cost.
Hugh Seaborn points to business secretary Vince Cable's desire for longer-term thinking: 'I think, post-financial crisis, some of our values are better recognised than before: long term, the consistent approach, the fact that we're here and not going away… When I face residents with a potential development scheme, I know I'm going to face them again with a different one, so you have to have integrity to make that work well.'
Lord Chelsea, he says, 'would talk very passionately about his sense of responsibility and the fact he is here to pass his assets on to future generations and to make sure they're in better condition than when he received them'.
Toby Shannon of de Walden frames it differently: 'I think we have an advantage over the PLCs because we can have a further horizon in terms of doing things correctly, which is a huge advantage.' There is an attitude difference too: 'The PLCs are very good at telling you how good they are. I don't think the estates are because they don't need to be.'
Never too old
It doesn't just go one way, of course: older great estates are learning techniques of survival and growth from the new. As John James says, 'When you look at what the great estates are doing now, they have suffered a lot of retreat in the nature of their property ownership because of their management.'
It took an end to their lease-reversion business model before the great estates realised they had to be more businesslike, employing professional CEOs like publicly held property development companies. Peter Barton of de Walden says most of the professional managers of the great estates will have come from the PLCs.
The prime modern example of what might be described as un-businesslike management is the anecdote about Earl Cadogan, who went into the Oriel, a restaurant on his land in Sloane Square, and was so outraged by the food and the prices that he told them he wasn't going to renew their lease. It shut in 2010 when the lease came to an end and has since been replaced by Corbin and King's Caf’ Colbert. (Hugh Seaborn says the building wasn't fit for purpose anyway, but the story stands.)
Over four months, I met many middle-aged white gentlemen and no aristocrats at all (though I did see Edward Chelsea's mug with 'His Lordship' on). This may seem facile, but it is the heart of the matter: we have moved from centuries of owner-operators, as it were, where the Duke of Somewhere would run his properties with seigneurial flair — and about as much business sense — to an era of professionalisation, with CEOs who know one side of a balance sheet from the other.
This is not to do down the generations of peers who have preserved and developed their patrimonies, and still do the things chairmen do, but that executive era has conclusively ended. And that is a great state, I would say, for the great estates.
Illustrations by Femke de Jong