FOUR WALLS: Key to the company flat

FOUR WALLS: Key to the company flat - News that Ken Livingstone forked out pounds 2.1 million of ratepayers' money to buy a house in Belgravia for the use of Robert Kiley, his American trouble-shooting Tube chief, may have sickened those who waste hours s

by RORY ROSS, a freelance journalist and property owner
Last Updated: 31 Aug 2010

News that Ken Livingstone forked out pounds 2.1 million of ratepayers' money to buy a house in Belgravia for the use of Robert Kiley, his American trouble-shooting Tube chief, may have sickened those who waste hours stuck on Tube trains and struggle to meet council tax payments. Ken would have been better off renting, say some experts. Yet institutional purchasing of property for employees is the rage these days.

In the past, companies preferred to rent property or check senior executives into posh hotels. As many as half of all lettings in central London are accounted for by companies putting up bewildered foreign executives (one bank is renting an apartment in the Bromptons in Chelsea for pounds 9,000 per week). But a Canary Wharf banker reckons that a corporate house or flat used more than 15 times a month is cheaper than staying in a hotel or renting.

Corporate flats are often plush numbers in expensive postcodes that shareholders get hot under the collar about when used by people like Greg Hutchings.

Some are used like hotels by executives inadvertently over-refreshed after a fully licensed meal, or by directors who get lucky with, er, an important business partner, which causes them to miss the last train home. Flats can also be treated as property plays and thereby return capital gains above and beyond their cost-saving - assuming the property is bought and sold in a rising market.

One of the biggest growth areas in corporate flats is to the east and south of the City. Docklands, Wapping, Limehouse and Butlers Wharf are filled with designer showboxes-with-a-view going for silly money. According to Matthew Wilkins, a negotiator at FPD Savills at Butlers Wharf, the boom is predicated on the expected growth of Docklands, where it is estimated that by 2010 some 160,000 employees will work.

What sort of properties are companies hunting for? Most corporate purchases are mid to high-range two-bedroom flats costing from pounds 400,000 upwards.

'But above all,' says Wilkins, 'companies insist on separate bathrooms, so that two executives staying together don't have to fight over the sink or put up with each other's mess. They want flats run as if they were serviced apartments. They don't want to spend any energy or brain power on having to keep them clean or the fridges stocked with champagne. They also like porters and 24-hour security.'

The pre-eminent Docklands development is Canary Riverside, which boasts the flagship Holmes Place health club (said to have the best spa in Europe), Ubon restaurant (sibling of Nobu) and 322 apartments with gleaming his 'n' his Italian marble bathrooms and top-of-the-range specifications throughout. As I write, there are a few still up for grabs from pounds 428,000 (2-beds) up to pounds 2.6 million (3-4 beds). 'They're dead cool,' swoons Matthew Wilkins, who is marketing them. 'I sold the flat on the 19th floor of the 21-storey tower the other day. From one room you can almost tell the time by Big Ben.' Sadly, however, the terms of the leases forbid any work to be done in these flats. So if you asked a secretary up to dictate a few letters, she wouldn't go down well.

Most companies that Savills sells flats to in Docklands aren't interested in capital gains. 'The sort of firms we deal with aren't too bothered if they make pounds 40,000-odd on a purchase,' says Wilkins. 'Sure, they'll barter, but only because they feel they ought to.'

You'd never say that of Sir Alan Sugar. In 1997, he purchased Gloucester House, a magnificent block propping up the Hard Rock Cafe in Mayfair, for pounds 8.5 million. He spent pounds 5.5 million doing bits of it up and sold one fully furnished 5-6 bedroom apartment for pounds 5.5 million. There are still four apartments left. Sugar is looking at sweet profits. More often, though, the corporate house is a modest and discreet affair, like those bijou mews houses in Belgravia where separate bathrooms aren't as important as mirrors on the ceiling. I know of at least one Belgravia-based captain of industry who has shacked up his mistr... Damn, I've run out of space.

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