DEVELOPER Patrick Despard seems jinxed when picking development sites for City & West End, his property company. Research on his last six London schemes has revealed that they include two former houses for "gentleman of low standing", a den of debauchery for wenching, gambling and cock fighting, and the home of former mistress of the king. His latest project is No 111 in the Strand, which was a thieves kitchen and, worse still, a sanctuary for the criminally insane in the 17th century.

Not part of protest umbrella group

PATRICK Despard, managing director of office property group City & West End Developments, stepped out of his Clifford Street offices - half way between Monopoly hot spots Oxford Street and Regent Street - yesterday morning and saw that it was raining. Not wanting to get his immaculately pressed suit spoiled by the elements, he put up his brolly, emblazoned with City & West End, and was promptly approached by a policeman.
"I'd put that down, if I were you sir," he said. "They might think you're one of their tour guides."

Offices get go-ahead

Plans for a 4,366m2 (47,000 sq ft) office development in Victoria were unveiled this week by Patrick Despard's City & West End. The developer gained planning permission last week to demolish the existing buildings at 77-95 Victoria Street, SW1, and replace them with a new office building design by architects MacCormac Jamieson Prichard. The new building will also include 1,022m2 (11,000 sq ft) of retail. Montagu Evans provided planning advice and works on site will begin in March 2004.

History Man

After developing three sites in Pall Mall that used to be brothels back in the 17th and 18th centuries, Patrick Despard's, chief executive of City & West End Developments, had been hoping for a more salubrious history at his latest one. The land between the Strand and the river was, historically, notorious for crime, through. So the site, at 111 Strand, was once a haven for performing illegal marriages, with five secret exits, and a Thieves Kitchen. Rather appropriate for a property company.

Designs for the redevelopment of 111 Strand, WC2, have been unveiled by City & West End. The developer, which severed its ties with US Security Capital late last year, has gained planning consent for a 5,017m2 (54,000 sq ft) redevelopment of the site as an office and retail scheme. Work will begin next month, with completion scheduled for September 2002. Saxon Law and Wilson McHardy are letting agents.

Akeler take Despard's office

PATRICK DESPARD'S CITY & West End is planning to dispose of its Mayfair office to ex-stablemate Akeler after its split with Security Capital.
City & West End is taking a short-term lease on a 280 sq m (3,000 sq ft) office at Bellhouse Joseph's 33-34 Jermyn Street, SW1. It will vacate its existing 650 sq m (7,000 sq ft) office at Clifford Street, W1, and Akeler will move in from 20 Berkeley Square, W1, to be closer to its parent company Security Capital European Realty. Saxon Law, which advised City & West End, declined to comment.
Although the West End is considered one of the best UK Markets, a series of potential letting is likely to fall through in the wake of the slowing US economy.
CB Hillier Parker is believed to have started remarketing space at 123 Buckingham Palace Road, SW1, which Corn Ferry had under offer at a record rent for Victoria of £618.93/sq m (£57.50/sq ft) from PA Management.

The space has come back to the market after an exclusivity period expired, but Corn Ferry may still complete the deal. This follows other deals which have fallen through, such as US fund Thomas Weisel's plans to take the former TrizecHahn space at Burlington Gardens, W1, and Morgan Grenfell's £1,076.40/sq m (£100/sq ft) deal at Cleveland House, in St James's Street. In Holborn, Lend Lease is poised to sign up for one floor at Mid City Place, comprising 3,715 sq m (40,000 sq ft) at around £538.20/sq m (£50/sq ft).
And this week Compaq is selling its 7,430 sq m (80,000 sq ft) 190 High Holborn, WC1, with vacant possession through Saxon Law, which is quoting a price tag of around £30m.

Doughty Hanson to pay £92m for ITN HQ

Five-year-old private equity firm targets City & West End's landmark building
Secretive UK private equity firm Doughty Hanson has exchanged contracts to buy ITN's landmark London HQ from City & West End, in its first large UK deal.
The company is believed to have paid Patrick Despard's company close to the £92m asking price for the building at 200 Gray's Inn Road, WC1, reflecting a 7% net initial yield. An exchange date has not been finalised.
Despard bought the 23,225 sq m (250,000 sq ft) office building in May 1998 from ITN for £71m and leased it back on a 15-year lease.
The building's subsequent sale has been held up because one of City & West End's tenants, UK telecom company Iaxis, went into administrative receivership earlier this year. It is understood that City & West End has since been marketing part of the space, which is expected to set new record rents for the building.

The glass-clad, Foster & Partners-designed office was built by Stanhope. ITN bought the building in 1993 for around £78m.
It is the first sign of activity from Doughty Hanson in the UK since it established a $550m (£344m) real estate fund in September 1999.
The deal structure for the purchase of the ITN building has not been disclosed, but market sources believe it will be injected into the fund.
Doughty Hanson was set up in 1995 by Nigel Doughty, a Nottingham Forest Footbal Club director, and Dick Hanson, who worked for CWB partners.
The company strategy is to set up a series of English limited partnerships, which will be held in US dollars.
The deal takes City & West End's disposals to more that £200m in the past two months. The central London specialist, which is owned by Security Capital European Realty, has sold its prime St James's development, Cleveland House, to Dallas-based Harwood International; its interest in 54 Pall Mall to Kuwaiti Oil; and 7 Burlington Gardens to Ivory Gate. The company is looking to invest the funds raised.
DTZ Debenham Tie Leung advised City & West End and Doughty Hanson acted for itself.

City & West End has sold another central London property. Ivory Gate has paid around £16m for Jil Sander's new London flagship store at 7 Burlington Gardens, W1. The price reflected a net initial yield of 6.4%. The Mayfair deal also includes two office buildings, 1-2 Old Burlingon Street, let to solicitor Davenport Lyons until 2005. CB Hillier Parker and Wilson McHardy advised City & West End, while Insignia Richard Ellis acted for Ivory Gate.

Despard grabs Pollen portfolio

Patrick Despard's City & West End Developments has bought two properties on Maddox Street, W1 from the Pollen Estate. The buildings, at 18 and 20-22, were bought as part of a £50m West End portfolio which includes 19 Clifford Street, 30-32 Savile Row and 10-13 Old Burlington Street.

City & West End buys five

Patrick Despard's City & West End has bought five West End properties from the Pollen Estate for £50m: 10-13 Old Burlington Street, 30-32 Savile Row, 19 Clifford Street and 18 and 20-22 Maddox Street. The first two will be redeveloped as 4,650 sq m (50,000 sq ft) of offices. Saxon Law and Wilson McHardy acted for City & West End. Drivers Jonas advised Pollen Estate.

Despard betters Benchmark in Mayfair

Patrick Despard's City & West End is in line for a major redevelopment in the heart of Mayfair.
Industry sources say the freeholder of the site, the Trustees of the Pollen Estate, wants a development partner on a block comprising around 4,645,m² (50,000 sq ft).
It plans to redevelop the properties, at 30-32 Savile Row, 20-21 Clifford St and 10-13 Old Burlington Street, to produce around 6,505m² (70,000 sq ft) after the leases on each of them expire in 2003.
Advised by Drivers Jonas, Pollen is also believed to have received an offer from Benchmark to cover the development costs in return for future rental income.
Mike Jones, partner at DJ, would not reveal the bidder's identity, but said: "We are in talks with one party. The offer presents an attractive gearing."
A source close to the deal said that Benchmark offered 30% gearing compared to a 50% offer from City & West End.
Prudential Property is head-leaseholder on each of the buildings but has not been offered a renewal of its contract.

Hat-trick for Despard

Patrick Despard's City & West End Developments is poised to complete an impressive hat-trick of deals next month.

Following the shock sale of the West End's most expensive building, Cleveland House in St. James's Square, to Harwood International, and the pre-letting of Monopolis, Despard is now about to sell his interest in 54 Pall Mall to another owner-occupier.

It is understood that a client of Jones Lang LaSalle, believed to be Kuwaiti Oil, is paying around £20m for the building, which equates to a full rent of £645.84/sq m (£60/sq ft).

The site totals 1,839 sq m (19,795 sq ft) and is spread over lower ground, ground and five upper floors.

Saxon Law, adviser to City & West End; and Jones Lang LaSalle, adviser to the buyer, declined to comment.

City & West End picks a Lime

ACE Insurance has completed the sale of 8-13 Lime Street, EC3 to City & West End. The property, opposite the Lloyds Building, comprises 2.787 m² (30,000 sq ft) of office and retail space and will be refurbished and relet in the short term and put up for redevelopment in 2006. Drivers Jonas acted for City & West End; GVA Grimley acted for ACE.

Pall Mall, St James's, Mayfair - property developer Patrick Despard is making them his fiefdom

His steps are small and precise and his features bland to the point of seeming unfinished, so little an impression do they make on the casual observer. Patrick Despard could be taken for a banker in his royal blue, calf-length coat, or a Jermyn Street tailor taking Englishness to an understated extreme. Anyone encountering him could be forgiven for not recognising the undisputed king of the West End property market.
Despard has developed more than an acre of St James's, an achievement which no one has matched since the 17th century, when Henry Jermyn, Earl of St Albans, secured the rights from Charles II to develop a field north of St James's Palace. The area has long been favoured by the wealthy. St James's Square was one of the earliest grand squares in London, and its proximity to the park and royal palace attracted aristocrats moving west from Covent Garden.
In the 18th century, it was a playground for idle and rich young dandies who gorged themselves on drink and games of chance. But by the 1900s, St James's was looking tired, its reputation as the most fashionable residential address had faded, and, as its elegant inhabitants deserted, commerce moved in.

During the second world war, the Blitz showed scant regard for the elegant architecture, and the gaps were filled in during the 1960s with concrete. But St James's and neighbouring Mayfair never lost their cachet as the addresses to have on business letterheads. Now largely a conservation area, the available property is highly sought after.
After Tokyo, the West End is the most expensive property market in the world. The City and Canary Wharf might have the space, but any self-respecting FTSE 100 company wants its headquarters in the West End.
The three principal sites in London for property investment are the Docklands, the City and the West End, according to James Whitmore, finance editor of Property Week. "But the West End really leads the market. The reason is that Westminster City Council is very strict about planning constraints, he says. "If you want to redevelop, you cannot develop more than has been done before. You're never going to see a skyscraper in Mayfair, so space is at a premium.

Supply is kept to low levels, and there is always a high demand, particularly from e-commerce at the moment."
In an area estimated to be just 100 million sq ft, rents eclipse City prices by as much as £10 per sq ft; and, as St James's is still the ultimate prize, a mere 12m sq ft makes 42-year-old Despard a very big player in a patch that he can walk in 15 minutes.
Back in 1998, US property investor Security Capital provided unlimited funds for Despard's property company, City & West End Developments, and he has since set out to build a £1bn portfolio in the City and West End; it already exceeds £5OOm.
His reputation as a leading player was firmly established with one significant purchase at the end of the last recession, when this quiet man made a judgment call that no one else was prepared to make. In January 1994,when he was managing director of the UK arm of Swedish property developer Arcona, he bought 50 Pall Mall, a former 19th century brothel, for £4.5m. It was the first speculative property deal since the property slump. "It was a very brave move," says Julian Stocks, of international property consultants Jones Lang Wootton. "Development had literally stopped overnight. Nobody was taking risks in the market. But he was the first to see that occupational demand was coming back."

In 1993, vacancy rates had reached their peak and rents their lowest point in years, plummeting in the West End from a high of £70 per sq ft to £30 per sq ft. Ask Despard about his decision to speculate at such an unpromising time and his answer is straightforward: "The West End had not changed. It was the still the place where everybody wanted to be, so it didn't seem a particularly difficult decision. The thing that is always the hardest to gauge is timing. Are you going to be six months too late or too early? With hindsight we were bang on time."
The 35,000 sq ft property was sold after a two year development programme to Barclays Bank for £20m. "It was a very successful scheme in terms of financial outcome," he says, with a face so straight that irony would never get a grip.

Since then, he has let Times Place at 45 Pall Mall, and is now putting the finishing touches to 54 Pall Mall, Cleveland House in St James's Square, and Monopolis in South Street. Unusually in the world of property development, Despard has exchanged contracts to sell Cleveland House even before construction has finished, reinforcing the desirability of the area. Companies affiliated to Harwood, a Dallas-based real estate company, will occupy most of the building, with the remaining space up for let. Much to the envy of agents, Despard has also pre-let Monolpolis before completion to Stora Enso and Flag Telecom. They are paying £65-£68 per sq foot - among the top West End rents.
Despite these successes, Despard is hardly the type to start splashing out on a private aircraft or a yacht. He is far too focused for such fripperies.
From his office in City & West End's headquarters in Clifford Street, Despard is already casting his net wider and playing the long game. In April this year, he paid £8Om for the freehold of Milton Gate in the City's Moor Lane, and it is let to PwC until June 2015.

Despard has spent his entire working life in the West End. He left Oxford University in 1980 with a degree in medieval history and joined the City office of chartered surveyors Allsops.
"It didn't take me long to realise he was very aware of what property was about," says equity partner John Oxley. Perhaps it is in the blood - before retirement, Despard's father, Herbert, was actively involved in financial services and property development. His mother is Norwegian, and many of Despard's contemporaries describe his style as "Nordic" without being able to put their finger on what exactly they mean.
"He's a very quick man, able to consider problems rapidly, and he doesn't suffer fools gladly," says Oxley. By the time he was poached by London & Paris Estates, four years later, he was a development agent and was quickly promoted to head L&P's development office.
"We were mostly dealing with new construction," says chief executive Peter Davidson. "It was the late 80's, the properly boom was in full swing, and he was our main acquisitions man. As a property developer, you spend at least 50 per cent of your time going up blind alleys, and Despard always had the ability to spot those opportunities that were going to happen.

"At that time, we had a lot of in-house project managers and architects, and we would do a lot of pre-planning on deals where we worked out exactly the kind of product we wanted to show the public. It was very much a philosophy of looking at what the customer wants, what they can afford, and delivering that. It's an idea that Despard has picked up and flown with."
In 1990, Despard joined Robert Maxted to run the UK-based Swedish company Arcona Properties. He became its managing director, and controlled a development programme worth more than £150m. Now a property young gun, Despard developed and marketed schemes at 84 South Audley Street and bought and sold on a 100,000 sq ft flagship site at 1~17 Great Marlborough Street. "He had an opportunity to go off with a Scandinavian developer and left at a natural time," continues Davidson. "It was the end of the cycle." Now he's on a new cycle, with Mayfair and St James's - an opportunity he spotted early.
His decisive nature makes him an easy partner, says Tim Kempster of architects Trehearne & Norman, which has teamed up with Despard on most of his West End schemes.
"Property management is a great art, but only a handful of people can do it really well because it's a constant decision-making process.

"You buy a property full of hope and expectation, and then try to confirm those assumptions by making decisions on almost a daily basis. But there are constant problems. The site is not as large as you first thought or the soil conditions are different.
"It's an exercise in controlled risks for three years until you eventually find the client to come in and rent. But that's his strength, because a lot of people in this game, having made their mind up, reconsider three weeks later. They treat it like a game of snakes and ladders, wanting to land on a specific square to avoid the pitfalls. He doesn't play that way."
Despard works closely with the architects on the design of his buildings, and he believes strongly in preserving the history of St James's and Mayfair.
But he has an Achilles heel. Again, that phrase "doesn't suffer fools gladly" crops up. "He's extremely bright," continues Kempster, "and in this business there are a lot of fools about. If he doesn't get the quality of service or advice he expects, he gets terribly tetchy. It makes him very demanding. If you fail to live up to your promises, it makes him extremely angry."
Despard puts his business philosophy more plainly: "I've got a very simple view: If it's not right, it's wrong, and if it's wrong, it's not good."

Opinions on Despard across thc industry are summed up in the same few words. He is described as focused, professional, unemotional and successful. "He refuses to fail," says Kempster. Whitmore at Property Week is a little more critical: "Talking to him is like trying to get water out of a stone. He's a dull Etonian, but a very successful one."
But turn to sculptor Marcus Cornish and you hear phrases such as "Italian prince" and "sensitive". Despard has commissioned Cornish to sculpt five bronzes of British wild animals, several of which are now extinct in the UK, for his recent developments. A wild boar will go into Monopolis, a hare in 54 Pall Mall, and a full-size stag in Cleveland House. An eagle and a wild cat already greet visitors in City & West End's reception area.

Cornish, a member of the Royal Society of British Sculptors, is based in Lewes, east Sussex. He says Despard has helped him to develop his style. "He makes a four-hour round-trip to my studio, just to say 'yes' or' no' to my ideas, but his combination of sensitivity and decisiveness has given me a much looser style than I had before.
"[Despard's] buildings use a lot of natural materials, and he's paid a lot of attention to the way natural light disperses itself inside the buildings. The sculptures come naturally because of the symmetry with the environment that he's created.
"These creatures are rural myths, not seen every day, and people don't know a lot about them. Perhaps Despard relates to them because of that. Property developers could be said to be a bit like wild cats. They have their own domain, and nobody ever really knows what they're up to, until they strike."

US investor buys Cleveland House in surprise £80m bid

Real estate company makes UK debut by paying record rent to City & West End for part owner-occupation in St James's

DALLAS-BASED PROPERTY COMPANY HARWOOD International stormed into the West End office market this week with the shock purchase of Cleveland House.
Harwood is believed to have paid Patrick Despard's City & West End more than £80m for the freehold interest in the prestigious building in St James's Square, which it will occupy alongside affiliated business clients. It will now target other central London properties for acquisition.
The purchase is based on an overall rent averaging £753/sq m (£70l/sq ft), with the upper floors fetching a peak of around £797/sq m(£741/sq ft) - a record rent for the West End office market this cycle.
Agents were stunned by the swiftness and secrecy of the deal, as many expected the building to be let floor by floor after ICI withdrew its interest in January.

The company has not finalised its occupation plans but it is likely to take between 3,720 sq m(40,000 sq ft) and 4,650 sq m (50,O00 sq ft) itself, leaving at least 1,860 sq m (20,000 sq ft) to 2,790 sq m (30,000 sq ft) of space still to let. CB Hillier Parker is advising Harwood. Saxon Law and FPDSavills advised City & West End.
The company's US spokesman, David Williams, said that Harwood is primarily a real estate company that develops and invests in property.
It also provides asset management and capital placement services, has an engineering and construction team, a facilities management business, and a technological support arm which offers network support, application and software development and website and e-commerce business solutions.
Harwood's reputation in the US was established in 1995 after it developed the first new office complex in Dallas for more than a decade.
It was founded in 1988 by Swiss-born Gabriel Barbier-Mueller, the group's president and CEO. He is also the Honorary Consui of Switzerland and director of the Barbier-Mueller Museaum in Geneva.

City & West to make news at ITN with £92m sale

City & West End Developments is planning to sell its ITN Building in Holborn for a profit of more than £20m.
Chief executive Patrick Despard brought the 26.198 sq m (282,000 sq ft) building at 200 Gray's Inn Road, WC1, to the market this week. It was aquired for £71m f in 1998. The company hopes to sell it for £92m.
Sources believe the building is being sold in order to reinvest in other central London schemes.
Despard also reached the £500m portfolio mark this week with the aquisition of 110-116 Strand, WC2 from the Duchy of Lancaster for £11.35m.
Despard said: "This latest acquisition takes our investment level to £500m, which clearly demonstrates our commitment to the West End and the City."
A planning application is to be submitted for the Strand. The mixed-use proposal, with retail and offices amounting to 3,716 sq m (40,000 sq ft), will have an end value of more than £30m.
Michael Squire & Partners will be the architect for the scheme, which is scheduled for completion by late 2002.
Saxon Law acted for City & West End in the purchase, while CB Hillier Parker advised the Duchy of Lancaster.

Flag Telecom is drawn to Monopolis

Flag Telecom is poised to agree terms to rent four floors at City & West End's Monopolis site in Mayfair.
Industry sources believe that Flag will take around 3,000 sq m(32,000 sq ft) of the 4,564sq m (49,130 sq ft) of space available at £700 per sq m (£65 per sq ft). City & West End would not confirm the deal but said the office building, on the corner of Park Street and South Street, has attracted a great deal of interest. Chris Jones from Houston Lawrence, who is acting for Flag, said: "Flag Telecom has a property requirement of more than 1,858 sq m (20,000 sq ft) of space."

Milton Gate, on Moor Lane, EC2, has been bought by a consortium headed by Patrick Despard's City & West End Developments for £80m. City & West End this week confirmed the purchase (tipped in EG, 18 March) of the 15,151 sq m (167,000 sq ft) office building from AP Fonden. The price reflects a net initial yield of 8.5%. The building, developed by Land Securities in 1990, is let to PricewaterhouseCoopers until 2015. Ingleby Trice Kennard acted for City & West End. Jones Lang LaSalle advised AP Fonden.

A ONE-LEGGED Eddie George is dead and well and haunting a basement in Burlington Gardens. I had better explain. Patrick Despard's City & West End Developments is doing up a site there that was the original home of the Bank of England. It later became the home of Lord Uxbridge, who lost his leg to a stray cannon ball at Waterloo. Workmen at the site insist a ghostly figure has been seen in the basement, quite possibly the shade of his Lordship. The apparition, in honour of the present Governor of the Bank of England, has been named Eddie.

City & West End pay £28m for Strand building

Patrick Despard's City & West End Developments has pulled off its first deal in the Covent Garden and Strand area of London.
The developer has bought Savoy Court East, off the Strand, WC1, for £27.45m, reflecting an initial yield of 6.5%.
The 5,295 sq m (57,000 sq ft) site comprises office space and some retail space, including Simpson's restaurant.
Despard, chief exceutive of CWE, said: "This confirms the company's position as one of the most active developers in the West End."

Jones Lang LaSalle acted for CWE. Franc Warwick represented the vendor, a private trust.

City & West buys Savoy

City & West End Developments, backed by US fund Security Capital, has bought Savoy Court East in London from Grosvenor Asset Management for £27.5m.
The 5,300 sq m (57,000 sq ft) office and retail property, last refurbished in 1994 when Citibank moved out, is earmarked for development.
The deal represents something of a departure for company boss Patrick Despard, as it is the first time the developer has acquired a site in Covent Garden or on the Strand. The deal reflects a net initial yield of 6.5%. Jones Lang LaSalle advised City & West End; Franc Warwick advised the vendor.

High fashion: Jil Sander moves to West End

Fashion retailer Jil Sander, part of Prada SPA, will open its latest store at City & West End Developments' 7 Burlington Gardens, London. The 1,530 sq m (16,500 sq ft) grade-II listed building will be the main retail space for Jil Sander menswear and ladieswear. Michael Peddar acted for Jil Sander; Wilson McHardy and Healey & Baker acted for City & West End.

Jil Sander banks on a fashionable British pad
by Rosie Murray-West

German fashion house Jil Sander is to establish a presence in London, and is renting a former Bank of England headquarters in Mayfair as a flagship British store.

The group, which became part of Prada in September last year, has exchanged contracts to lease Burlington Gardens, once occupied by the Bank of England but more recently by Royal Bank of Scotland.

The banking hall of the 16,500 sq ft building will become the main retail space for the group's menswear and ladieswear lines.

Jil Sander was started in Hamburg in 1968 and has since expanded from womenswear to include menswear and a lucrative range of cosmetics. City & West End Developments, owned by Patrick Despard, is letting the building.

The exact terms of the contract have not been disclosed, but a figure of £750,000 has previously been mentioned in connection with the lease of the building.

Building Bridges

Builders were very much on Ken Livingstone's mind as he performed the last topping out ceremony of the Millenium at Patrick Despard's development Cleveland House, in St James's Square yesterday.

"My only experience of building is my bathroom," said Ken, "which a slow builder has taken since September to complete, far longer than this has taken. It's nothing elaborate, a simple bath, white tiles, but I believe there are problems with the joists.
"Traditionally, in Rome, the architect was thrown from the rooftop in this ceremony," he continued, no doubt with his own builder still in mind. "But he hasn't appeared today, so we can't do that."

Ken Livingstone will go down as the last man to "top out" a London building this millennium. He will place the final brick on Patrick Despard's development Cleveland House, in St James's Square, on Thursday. Amphibian-loving Ken will feel an affinity with the site - in the 17th century St James's Square contained a large pond much favoured by the local newt population.

Five developers vie for key residential and commercial development

Bidding hots up for Pru's Knightsbridge Green site
Amber Rose

International developers are competing to buy the freehold of Prudential's Knightsbridge Green in London - seen as of one of the world's premier residential development opportunities.

As the deadline for bids on the £110m site approached last week, it emerged that the battle was between five developers, including two US companies.

Sources close to the negotiations said the key players were Howard Ronson's US group URO International and US giant Tishman Speyer.

Barratt, Singapore developer Pidemco and Patrick Despard's City & West End Developments are also in the running.

There are also rumours that Godfrey Bradman's European Land and private residential developer West City Holdings are interested in the site.

The site, which will cost £500m to develop, forms one-third of Prudential's Knightsbridge Green Holdings. The Pru has planning consent for 55,740 sq m (600,000 sq ft) of luxury homes and for the commercial element, which it says it will develop itself.

But a spokesman for City & West End Developments confirmed that Despard was bidding for both the residential and commercial sites at around £200m. A source advising one of the bidders said he thought Despard had clinched the deal.

This is the second time Despard has made a play for Knightsbridge Green. In December last year, he tried to muscle in on the scheme by unveiling audacious plans for a £750m redevelopment.

James Thomas, a director of Jones Lang LaSalle, which is advising on bids, said: "We will decide whether to shortlist or make a final decision by the end of the month."

Prudential's site is one of the most expensive ever to be marketed. One source said that developers would have to sell apartments for around £12,900 per sq m (£1,200 per sq ft) to make worthwhile returns.

PATRICK DESPARD, chief executive of City & West End, has been puzzled by the number of "twitchers" ringing his office. They all report excitedly that several shags, a sort of cormorant, have been spotted at his Pall Mall development. These are normally coastal birds, but have turned up this year at St James's Park and taken refuge on his site. Despard has been told it is all down to global warming.

Fish-loving property developer Patrick Despard, boss of City & West End Developments, has big plans for the flagship ITN building in Gray's Inn Road, London. He's asked for a giant tropical fish tank to be installed in reception for the millennium. It will hold 20 tons of water and up to 4,000 exotic fish. And if they need any sharks, there are plenty of law firms nearby.

I need very little excuse to publish a picture of the delectable Naomi Campbell and, indeed, I have a very little excuse. Naomi and her supermodel friends are doing a catwalk show for London Fashion Week in one of Patrick Despard's West End buildings, 7 Burlington Gardens.
That's it.
Mind you, it might be worth giving Patrick a ring to see if you can secure a backstage pass - there may not be many sq ft of flesh on view, but it'll probably be the best space you see all year.

Pru offers site at Knightsbridge
By Doug Morrison

LONDON's most prestigious residential development site - nearly two acres of Knightsbridge - is being put up for sale by the Prudential for more than £100m. The move is likely to generate bids from around the world.

The land, a few yards from Harrods, forms a third of the Pru's Knightsbridge holdings and represents one of the biggest site sales this year.

It is understood that the Pru's property advisers, FPD Savills and Jones Lang LaSalle, have already offered the land to more than 45 bidders as part of an international marketing campaign.

It is one of three sites collectively known as Knightsbridge Green where the Pru has recently won planning permission for a piecemeal development after scrapping a controversial, comprehensive scheme several years ago.

The proposed sale is certain to add to the tension between the Pru and City & West End Developments, the company which is planning a £750m commercial and residential scheme for all three sites.

City & West End is pursuing its proposals, due to be considered by Westminster planners in November, despite controlling a minority interest at Knightsbridge Green.

The company, which is backed by America's powerful Security Capital investment group, has tabled a £200m for the three sites but has been rebuffed by the Pru. Neither side would comment.

However, City & West End is expected to bid for the site being marketed in an attempt to strengthen its position for its proposed project, which has been well received by Westminster 's planners.

It was thought earlier this year that the Pru would develop all three sites itself. It has denied that the sale represents a strategy about-turn.

Colin Jones, development director, said: "We took the view at Prudential that our skills were better focused, in the main, on the commercial elements of our Knightsbridge proposals".

The site being sold has planning consent for a 600,000 sq ft development, involving 159 apartments and six town houses. The Pru is committed to developing the other two sites, involving 565,000 sq ft of commercial space.

The final space at Patrick Despard and DespaFonds 5,733 sq m (61,710 sq ft) Times Place, 45 Pall Mall, SW1 has been let to Origin UK. It took 361 sq m (3,896 sq ft) ground floor at £430 per sq m (£40 per sq ft). Conway Relf, DTZ Debenham Thorpe and Richard Ellis St Quintin acted for Despard and DespaFonds.

ESTATES GAZETTE, 3rd July 1999

Patrick Despard's City & West End has paid Hammerson £13.5m for 77-95 Victoria Street, W1. The 4,692 sq m (50,500 sq ft) of office and retail space is let to the City of Westminster until 2004. The price shows a net initial yield of 9%. Despard said: "This provides us with some secure short-term income and excellent development potential." City & West End was represented by Purkiss Hanrahan. Healey & Baker acted for Hammerson.

ESTATES GAZETTE, l2th June 1999

A Hat-Trick for Patrick Despard, chairman of property group City & West End. The 40-year-old has just signed a deal to develop 54 Pall Mall, having already got numbers 44 and 50 under his belt. He decided to do some research into the history of the three properties. "They were places of decadence," he says demurely. Despard's fact-finding revealed that 300 years ago, number 50 was a "bawdy house", number 44 was a "latter day Stringfellows" and number 54 was "a place of licentious behaviour frequented by bawdy gentlemen and members of the aristocracy." I doubt whether the new residents who include Arjo Wiggins and Barclays Bank are having as much fun.

THE DAILY TELEGRAPH, 10th June 1999

PATRICK DESPARD'S City & West End Investments has bought Film House in London's Wardour Street from Langbourn Property Investment for £20m.

The 8,370 sq m (90,000 sq ft) building is fully occupied by media and entertainment businesses. Built in the 1920's, it is held on a lease from the Sutton Estate.

'It has a number of interesting opportunities to increase income and improve value,' said Despard.

The off-market deal was introduced by Dixon Studd.

PROPERTY WEEK, 19th March 1999

How the west was won

City & West End's success is largely due to Patrick Despard's enviable knack of reading the market. Clayton Hirst profiles the company

Being a good property developer is like being a skilful comedian: get your timing right and you'll be laughing all the way to the bank. Take John Beckwith, the man who built up LET and sold out to the Swedes at the top of the market, netting £510m. His reputation is largely due to this perfectly calculated deal.

But good timing in property is knowing when to push the button as well as pull the plug. Patrick Despard, the softly spoken head of City & West End Developments, aspires to this principle.

In the early 1990s, Despard realised that the West End market could get no worse and was the first to start speculatively developing after the crash. Schemes such as 50 Pall Mall - which he bought in 1993, redeveloped and sold in 1996 for nearly £2Om - made him stand out in the crowd of West End developers.

The Eton and Oxford-educated developer's career took off when he was appointed UK managing director of Arcona Properties. In spring 1996, Arcona pulled out of London; Despard saw this as an opportunity to run his own show and instigated a management buyout that led to City & West End.

The company grew steadily with a £2Om portfolio and four staff. But last year it was hunted by Security Capital. After two months of talks, the US investor took a majority stake and promised an equity injection to grow City & West End into a £lbn concern.

Today City & West End has 15 staff and is valued at £300m. Despard hopes to increase this to £400m by the end of this year, and he aims to float the company in three to four years, possibly in New York.

City & West End's growth hasn't, however, been without its glitches. Last October; agents were stunned to receive telephone calls from Despard, informing them that Security Capital had pulled four major deals.

Despard says: 'Because of the global economic situation, Security Capital came to the view, which I shared, that we did not need to do all the deals on the table.'

He denies that the decision was due to overexposure in St James's, where his company owns more than an acre of land; rather, the move was 'a pause for breath'.

Today Despard is back in the market. He has staged a flagrant bid to take control of Knightsbridge Green, a site that Prudential has been trying to redevelop for more than a decade. Despard has secured an option to buy Silver City House, which he claims is the key to comprehensively developing the site. His planning application for a £750m mixed scheme is due to be considered by Westminster Council on 11 March, and Despard is unwilling to comment before then.

Despite the company's name, City & West End is not interested in the City. 'I have only one thing in the City at the moment and, thankfully nothing else.'

He fears that CIT Markborough's proposed mixed scheme at London Bridge could draw tenants looking for lower rents from the City.

By contrast, Despard talks fondly of the West End. He quotes the 3% vacancy rate on Grade A space in Mayfair and St James's as a good reason for developing there.

Despard wants to squeeze extra income from the West End via short lets, and has commissioned solicitor Wilde Sapte to work on the idea. 'The move is earnings-driven rather than NAV-driven. Short lets have fewer incentives and produce higher rents.'

Despard hopes to introduce three-, six- and nine-year terms at Cleveland House, 9 South Street and 54 Pall Mall. On a three-year lease, he expects at least a 10% rental premium.

This says a lot about Despard's view of the market. With shorter leases, he will expose himself to potential breaks in cash flow in, say 2003, 2006 and 2009. And that could be the toughest test of his timing yet.

CITY & West End Developments, the private property company backed by America's Security Capital group, has launched a £750m project to redevelop London's most prized site, Knightsbridge Green opposite Harrods.

The move comes at a time of huge uncertainty in the London property market and also brings City & West End face to face with the Prudential, which has failed to pull off two similar projects on the site over the past decade.

City & West End, headed by Patrick Despard, is banking on the support of Westminster council on a site that has degenerated into a blot on the Knightsbridge landscape. A planning application has been lodged with Westminster council involving 1.2m sq ft of offices, shops and luxury homes.

Despard has made his strike despite the Pru owning the bulk of the 4.5-acre site but with the comfort of gaining control of a key building. He has also reached an informal understanding with the Kuwaiti owners of the adjacent Normandie hotel to include it in the plan.

City & West End has held discussions with the Pru, which has been forced to pursue more modest plans for Knightsbridge Green after its last mega-scheme was ignominiously thrown out by Westminster's planners earlier this year. Westminster is now likely to consider both sets of proposals next spring.

Doom mongers have got it in for London's property market but developers never say die. Now, plans for one of the capital's most ambitious projects - and best kept secrets - have been thrown open to public scrutiny.

Details have emerged of a £750m scheme, a few yards from Harrods in the heart of Knightsbridge. It is a development proposal of breathtaking opportunism and one that will stun the property world.

It has already taken the wind out of the sails of the mighty Prudential, which owns most of the site in question, Knightsbridge Green. The Pru has struggled in vain for more than a decade to get anything off the ground.

The new proposal - a seductive concoction of offices, shops and luxury homes - comes from City & West End Developments, the private property company run by Patrick Despard, and backed by Security Capital, the giant American investment group.

Last Wednesday, Despard lodged a planning application with Westminster council for a comprehensive redevelopment of nearly five acres, the culmination of two years of behind-the-scenes work.

Despard says: "It's the best and biggest site in London I know and you are pushed to find something like this in any European capital."

At the moment the site is a nasty blot on the landscape of London's poshest shopping district, a neglected collection of 1950s office blocks, empty or soon to be vacated and crying out for an attractive remedy.

The masterplan, drawn up by Hamilton Associates, the architect, envisages 240 apartments, new shops, including a department store, for the Brompton Road, a new public square surrounded by restaurants and cafes and a link to Knightsbridge Underground station. Despard's plan calls for 475,000 sqft of offices in a 19-storey tower and it is this that will possibly be the most contentious issue, at least for Westminster's planners. For the Pru, there is the more delicate issue of a developer sloping into its territory - but with the ability to play two trump cards.

The first is that City & West End has secured an option to buy from BP Pension Trust, a building opposite Harrods and called Silver City House. Whoever succeeds in a comprehensive scheme for Knightsbridge Green needs Silver City House.

The second trump card can be played on the old Normandie Hotel, now used as serviced suites and which lies at the heart of the site. It is owned by Waterloo Real Estate, a UK vehicle for Kuwaiti investors, and is the subject of legal dispute over access with the Pru. Despard is understood to have reached an informal understanding with Waterloo, which wants to rebuild the Normandie as an Inter-Continental Hotel. Indeed, it is included in Despard's masterplan.

It is safe to assume that Despard would not have reached this stage without some measure of encouragement from Westminster's planners, who zoned the site for comprehensive development seven years ago.

Despard has built a formidable reputation as one of London's most astute developers. Now he appears to be forcing the hand of Britain's most powerful landowning insititution in a tantalising game of property poker.

The Pru has advanced two mega projects for the site over the years. The first was unviable (partly because of Silver City House).

The second was thrown out by the planners this year after the Royal Fine Arts Commission launched a stinging attack on "an architectural disaster for London."

The Pru retired hurt and has come back with three smaller schemes for the site, all of which will have to be examined by the planners alongside Despard's grand vision, probably early next year. Should the Pru throw in its lot with Despard?

Colin Jones, the Pru's development director, says: "Our preferred option is still to pursue the site as three separate developments. We are sceptical about the deliverability of City & West End's proposal although the Masterplan looks quite compelling."

Both sides admit to having had discussions but there is an understandable air of circumspection based on an unholy combination of hurt pride and financial pragmatism. The Pru holds most of the land. Despard appears to have a feasible - and potentially money-spinning - project for Knightsbridge Green for the first time in a decade. Any deadlock between the two camps will likely blight a large chunk of Knightsbridge for years to come.

If Despard can strike an agreement with the Pru, Knightsbridge Green will undoubtedly take City & West End into the big league of British property further vindicating Security Capital's backing.

Earlier this year City & West End was the first corporate move in a European expansion drive by Security Capital, leaving Despard with a substantial minority stake, the ability to tap huge capital resources from America and the prospect of a stockmarket flotation some years down the line.

The company has spent £l83.4m on London offices most notably the £71m acquisition in May of the Independent Television News landmark head quarters on Gray's Inn Road. But the scale and complexity of Knightsbridge Green is in a different league.

It falls into the same bracket of giant London property projects as Paddington, where there are several development proposals, and White City, where Chelsfield is committed to a vast shopping and leisure complex costing £450m. All of them, in various guises, were conceived in the 1980s boom. Ironically as London is poised to suffer a painful economic down tum, they all appear closer to happening than at anytime in the past decade.

Of Knightsbridge Green, Despard says: "There's no such thing as risk-free development. But the solidity of the market for each of the three components - offices, retail and residential is very strong. It is also fair to say that we're looking well through the short term before this is completed. Over the duration of the project any short-term uncertainties will have resolved themselves."

Construction costs alone total £600m, and those exclude the Normandie, which would be funded by its Kuwaiti owners. The whole project would take three years to build. Security Capital has the financial clout to do it, so too does the Pru. Perhaps Despard's biggest uncertainty is getting everyone round the negotiating table.

Plans for a £750m development opposite Harrods in the heart of London were revealed this week.

City & West End Developments, the property company run by Patrick Despard and owned by US giant Security Capital, has submitted a planning application to Westminster council for a 112,582 sq m (1.2m sq ft) redevelopment of the Knightsbridge Green site, SW1.

Despard's bid to develop the whole of the I.8ha (4.5 acre site), bounded by Brompton Road to the south, Knightsbridge to the north and Lancelot Place to the east, competes with plans by Prudential. The Pru owns 1 Knightsbridge Green and 195-199 Knightsbridge and had been trying for several years to create a scheme acceptable to Westminster planners. A consent granted in 1995 has lapsed, and an application made in 1996 was turned down in March on design grounds.

In October, the Pru scaled down its plans and submitted a scheme to develop residential on the northern portion of 195-199 Knightsbridge and commercial on the south-western portion. The Pru said that it was also considering a refurbishment of 1 Knightsbridge Green.

However, the council's brief for the site is for a complete redevelopment. City & West End has agreed to buy two key ownerships on the site, needed for a comprehensive scheme: BP's Silver City House, on the south side of the site; and the Hotel Normandie at the north-eastern corner.

Under Despard's plan, the hotel would be re-sited, further west on Knightsbridge. His scheme also includes:

44,208 sq m (475,866 sq ft) of offices, including a 19-storey office tower in the centre of the site, with 3,716 sq m (40,000 sq ft) floorplates;
13,728 sq m (148,353 sq ft) of retail fronting Brompton Road;
36,294 sq m (390,678 sq ft) of residential in 220 flats off a public square with community shopping;
and a direct link to Knightsbridge Underground station.

Despard said that City & West End would finance the scheme: "We are prepared to build it speculatively. It would be a crying shame not to develop this site comprehensively; 4.5 acres freehold opposite Harrods is sensational, it's the best I've come across in London." DTZ Debenham Thorpe and Saxon Law will advise on the offices; WA Ellis on the residential, Lunson Mitchenall on the retail. Hamilton Associates is the architect.

PATRICK DESPARD'S City & West End Developments has launched an audacious bid to redevelop the £750m Knightsbridge Green site in London, mostly owned by Prudential.

The Security Capital-backed developer has secured an option to buy Silver City House, opposite Harrods, from BP and is using it as a springboard to masterplan the 1.8ha (4.5 acre) site.

The 116,128 sq m (1.25m sq ft) plan includes 46,451 sq m (500,000 sq ft) of offices, 13,935 sq m (150,000 sq ft) of retail and 240 flats, as well as the redevelopment of the Normandie Hotel and the creation of a new link to the underground at Knightsbridge.

City & West End envisages a single-phase development of the scheme and, if planning goes smoothly it would be ready in 2003-2004. It is likely that a specialist residential developer would be brought in, but City & West End sees the offices - featuring a 19-floor tower - as the 'Jewel in the Crown'.

However, Colin Jones, central London development director at Prudential, said: 'It's at odds with our strategy. I would be slightly sceptical on deliverability. It's definitely not our preferred option, but we would have to review it when we see the plans.' A City & West End source said: 'Assuming we get consent, there's pretty compelling reasons for Prudential to talk to us. By pursuing comprehensive redevelopment we are generating significantly higher value.'

The scheme conforms broadly with the massing of a 1995 consent for the site won by Prudential. A revised scheme was turned down in May. Prudential now has three planning applications pending for different parts of the site.

DTZ Debenham Thorpe and Saxon Law are advising City & West End on the office element of the scheme. Lunson Mitchenall is advising on retail and WA Ellis on residential.

Cleveland deal completes

Prudential has completed the sale of Cleveland House on the corner of St James's Square, London, to Citv & West End Developments for £30m. The deal includes planning consent for 6,500 sq m (70,000 sq ft) of office and 975 sq m (10,000 sq ft) of residential space. Weatherall Green & Smith acted for City & West End; FPDSavills acted for the vendor and, with Saxon Law, has been appointed letting agent.

Patrick Despard's City & West End Estates has pulled out of four West End deals amid speculation that his US backer, Security Capital, is withdrawing from the UK market.

A spokesman for Despard confirmed that the four cancelled deals are with:
AXA Equity & Law to redevelop 105 Wigmore Street,
the Worshipful Company of Goldsmiths to redevelop 28 St James's Square,
Barclay Property Holdings on the £50m Kinnaird House redevelopment on Trafalgar Square,
and an off-market deal in St James Street, thought to be with Henderson.

The spokesman added: "In view of the global financial uncertainty, it would be irresponsible to speculate now. So these four deals will not now happen. Our other eight schemes will be going ahead. The longterm corporate goal is exactly as stated."

US REIT Security Capital owns a 50% stake in City & West End. It also controls major stakes in Akeler, residential developer London & Henley, and self-storage specialist Acorn Storage Centres.

But a Security Capital spokeswoman dismissed speculation that the fund was about to pull back its UK investments. She said: "We have already deployed £1bn in Europe and some of our companies are in the midst of further transactions. We are not withdrawing and the strategy remains unchanged."

Despard, who earlier this year declared that his company's aim is to build up a £1bn property portfolio within five years, has so far acquired property worth £200m.

US RECRUITMENT firm LAI is to take three floors at Arcona/ Despa's Times Place in Pall Mall, leaving just three floors vacant.

LAI, represented by Richard Ellis, has signed for 2,323 sq m (25,000 sq ft) on floors two, three and four. The company will pay a stepped rent starting at £516.67/sq m (£48/sq ft) and rising to £548.96 sq m (£51/sq ft) after five years, with one year rent-free. The deal leaves the lower ground and first floors remaining, after fund manager Doughty Hanson took three floors on a similar lease in March.

DTZ Debenham Thorpe, Conway Relf and Richard Ellis are letting agents at Times Place. Meanwhile, IT consulting firm EDS, represented by Vail Williams, is believed to be eyeing the vacant space at Times Place, along with the Glaxo Wellcome space at Lansdowne House, W1. It has a 1461 sq m (12,500 sq ft) requirement and observers predict that it will end up in Lansdowne House, which is being marketed by DTZ.

Elsewhere in the West End, telecommunications firm Globix, represented by King Sturge, has put 1,858 sq m (20,000 sq ft) under offer at Prospect House. The quoted rent is £376.74/sq m (£35/sq ft). DTZ are the letting agents.

PALL Mall is a little racier than one might imagine. Patrick Despard, a fabulously wealthy property tycoon, found that both of his last two sites there had been notorious brothels in the 18th century. He has now acquired No 53-54: apparently, 200 years ago it was "an exceedingly bawdy and sinful place frequented by gentlemen". That would be the RAC, then.

Patrick Despard's City & West End Developments is increasing its West End presence. It has recently acquired the freehold of 53/4 Pall Mall, which will be redeveloped behind its listed façade, and leaseholds of No 1 South Street and a former headquarters building at No 2 Park Street (demolition under way in both cases). The vendor at Park Street was an overseas investor and the deal took place simultaneously with Grosvenor Estate Holdings on an agreed new long lease for a total purchase consideration in excess of £13 million. Colliers Erdman Lewis advised City & West End while Grosvenor Estate Holdings represented them.

Patrick Despard's City and West End Developments is to buy 53/54 Pall Mall, London, for £7.4m. City and West End, which was bought by US investor Security Capital Global Realty earlier this year, is to develop 1,858 sq m (20,000 sq ft) of office space and a residential unit behind the building's partly retained façade. The scheme has planning consent and the project is due for completion in spring 2000. The deal is Despard's fourth project in St James's, the others being 50 Pall Mall, 44-47 Pall Mall and Cleveland House on St James's Square. Conway ReIf and Saxon Law are letting agents.

MONDAY To Wiltons, Jermyn Street, for lunch with my chum Patrick Despard, top man at City & West End Developments. He brought along his lap-top PR, Nigel Massey.

Over the champagne and lobster cocktail, chat was about stalking and fishing. Keen to justify his fees, Massey tried to steer the conversation around to his client's business; we resisted, and were well into the fish and chips before we got round to how well Despard is doing with his new American shareholder, Security Capital.

The American investor bought the majority of Despard's company, but he still has a significant stake. The idea is that over the next five years City & West End will create a £1billion portfolio. It is on target and has already £300m under its belt.

Over the past five years, Patrick has been the most active investor in St James's. He has just completed his third deal in Pall Mall with the purchase of numbers 53-54 for £7.4m. Like his other two Pall Mall deals at 44-47 and number 50, it was also a former 19th century brothel.

Our chat over coffee was about rivers and mountains.

Patrick Despard's City & West End Developments has bought the leasehold of 2 Park Street, W1, for £13m, from a private investor. Grosvenor Estate simultaneously granted a new long lease. The site has consent for a 4,645 sq m (50,000 sq ft) office scheme and work should start in autumn for completion in mid-2000. Colliers Erdman Lewis advised the buyer.

PATRICK DESPARD'S CITY & West End developments has completed the purchase of 19 freehold buildings at 2 -19 Percy Street, and 8 -11 Stephen Mews, W1 from TBI for £17m. The estate totals 7,111 sq m (76,546 sq ft) of retail, restaurant, offices and residential and generates income of around £1.1m a year; reflecting an initial yield of 6.1%. Allsop & Co acted for City & West End, while Franc Warwick advised TBI. City & West End, backed by US investor Security Capital, plans to build a portfolio of $1bn (£600m) with a view to flotation in four years.

Patrick Despard's City & West End, which so far this year has spent £151m on Central London property, is poised to make four new major West End investments that will be held as part of a projected £lbn investment portfolio.

Despard has acquired TBI's Percy Street Estates, a collection of 19 separate buildings totalling 7,106 sq m (76,500 sq ft) on the south side of Percy Street, W1, for £17m. The deal there will yield TBT a £2m profit in 18 months' time.

A source close to Despard said: "It's too early to have firm plans for Percy Street, but it's likely that there'll be a major redevelopment." Franc Warwick advised TBI. Backed by Security Capital, Despard is close to finalising negotiations to form a joint venture with Barclay Property Holdings to develop Kinnaird House, which occupies a strategic site on the corner of Pall Mall and Trafalgar Square.

Despard has beaten off London & Paris to become Barclays' partner on the scheme, which will ultimately yield an office scheme totalling 5,667 sq m (61,000 sq ft) with an end value of £50m. Despard is likely to gain a share of the 125-year leasehold held by Barclays; the freehold is owned by the Crown.

City & West End is also poised to exercise its option to buy Grosvenor Estate's block at 2-6 Park Street and 9 South Street in Mayfair for around £l0m. Formerly the British Standards headquarters, a controversial redevelopment gets under way later this year for a 5,388 sq m (58,000 sq ft) office on the site.

The planning officer said he "regretted" having to grant permission for an office scheme on the site in the face of opposition from local residents. City & West End is also negotiating to acquire 53 and 54 Pall Mall, owned by Hilstone Development. The buildings could be redeveloped to form a 2,323 sq m (25,000 sq ft) single office scheme.

Despard has indicated that he wants to build up a central London portfolio worth £1bn before floating his company in around four years' time.

So far this year, Despard's company has acquired 7 Clifford Street for £28m; the former Royal Bank of Scotland building at 7 Burlington Gardens, W1 for £13.8m; 7-9 Portland Place, W1 for £2.2m; Cleveland House in St James's Square, SW1, for £30m; and the ITN building, on Gray's Inn Road, for £77m.

Despard's buys are part of a plan to enlarge his London portfolio

PATRICK DESPARD'S City & West End Developments, backed by Security Capital, has completed the purchase of the ITN building, 200 Gray's Inn Road. City & West End paid £71m and is to lease the building back to ITN for 15 years. The deal, exclusively revealed in Property Week, shows an initial yield of 5.25%. The leaseback arrangement with ITN guarantees a 15% rent uplift over five years from a base of approximately £226/sq m (£21/sq ft).

Despard's late bid, which beat competition from UK and overseas investors, illustrates the speed with which Security Capital is prepared to move when it sees an opportunity. Other occupiers include Reuters, Sunday Business and Channel 5.

Jones Lang Wootton acted for ITN, DTZ Debenham Thorpe advised City & West End.

City & West End Property Investments has let space on the top floor of 7 Clifford Street, W1, at a record-breaking £700 per sq m (£65 per sq ft).

The central London office developer, run by Patrick Despard and controlled by US giant Security Capital, has let 232 sq m (2,500 sq ft) on the fifth floor to futures company Sintec. Peter Shaw of Saxon Law, which is advising Despard, commented: "It is an exceptional floor. You won't find that amount of space with its own little terrace anywhere."

City & West End bought the Clifford Street building from Pillar for £28m last month. It occupies the fourth floor itself, while Security Capital is leasing 1,850 sq m (20,000 sq ft) on the first, second and third floors at around £lm pa.

Contracts have been exchanged on the 1,022 sq m (11,000 sq ft) ground and basement space with Hugo Boss, which is believed to have agreed a rent close to £400,000 pa. The menswear retailer wants the space as its European headquarters and is applying for change of use to a showroom.

Patrick Despard's City & West End Developments is putting the former West End branch of the Bank of England at 7 Burlington Gardens, W1, on the market at a quoting rent of £750,000 a year. Ironically, the current occupier of the 1,486 sq m (16,000 sq ft) listed 1724 building is Royal Bank of Scotland. Wilson McHardy is the letting agent.

ITN has agreed to sell its high-tech headquarters at Gray's Inn Road to City & West End Developments, the private property company run by Patrick Despard and backed by Security Capital, the US real estate fund.

The fund is one of a number of tax-shelter vehicles known as Real Estate Investment Trusts that are moving into the British property market.

ITN is believed to have accepted a bid of between £70million and £80million from Mr Despard, who only last month agreed to sell City & West End to Security Capital. The Americans are believed to be amassing a £1billion European property portfolio.

ITN's headquarters was designed by Sir Norman Foster and developed by Stanhope Properties in the early 1990s. In 1993, at the bottom of the market, the television company bought the building from the developer for less than £70million. It could reduce its outgoings by paying interest instead of rent. The 275,000 square feet property is now fully let and ITN is expected to lease back the third it occupies. The rental income is about £6 million, providing a yield of about 8 per cent.

ITN, the television news organisation, is poised to raise £75m from the sale of its landmark headquarters on London's Gray's Inn Road.

The glass-fronted building designed by Sir Norman Foster is under offer to City & West End Developments, the private property company run by Patrick Despard and backed by Security Capital, the giant American investment group.

Despard has beaten off fierce competition from British and overseas investors for the 275,000 sq ft building which is also occupied by a host of media groups including, Channel 5, LWT, the Independent Television Association and the Barclay brothers' European and Sunday Business publications.

ITN's sale, which will show an 8 per cent yield and is expected to be completed in the next few weeks, follows a global marketing campaign by Jones Lang Wootton, the news group's property consultant.

City & West End is thought to have edged out bids from at least two large UK institutions and quoted property groups, including Minerva. Private American and Israeli investors also tabled bids.

The ITN HQ is Foster's only central London building and was developed by Stuart Lipton's Stanhope group and let to ITN at the top of the market. ITN bought it from Stanhope in 1993 to escape from its huge rent burden and the imminent sale is expected to show the news group a small profit. ITN will continue to occupy a third of the office space as a tenant, paying about £30 per sq ft.

The ITN deal will take Despard's spending on London offices to more than £130m following last month's refinancing of his company by the $6bn Security Capital group.

City & West End was the first corporate move in a European expansion drive by Security Capital and Despard is understood to have up to £450m to invest in London offices. Despard has also recently paid £28m for a West End office building developed by Pillar Property in Clifford Street, which will be Security Capital's new headquarters. Despard has also paid the Prudential £30m for Cleveland House in St James's, a building that has been earmarked for development.

INDEPENDENT Television News (ITN) is to sell its land-mark London headquarters to a property company backed by Security Capital, the giant American real estate investment trust, for £80m

ITN bought the building five years ago for £77m as part of a financial restructuring when it was taken over by a consortium led by Carlton, Granada and LWT. The acquisition was never seen as a long-term investment for the television group and the complex was discreetly marketed to potential buyers last year.

The purchase shows Security Capital's intention to become a big player in the British and continental property markets. Last month the American company bought City & West End Developments, a private company headed by Patrick Despard, and said it was prepared initially to invest up to £400m in the sector with plans to raise it to £1billion over time.

ITN is the biggest occupier of the building in Gray's Inn Road and it will pay rent to the new owner. Other tenants include Reuters.

The award-winning building, developed by Stuart Lipton's Stanhope property company in the early 1990s, is known to millions of television viewers who watch lunchtime news and News at Ten on the ITV network.

When ITN moved into the property it took a 35-year lease, which became the main source of its financial problems.

Patrick Despard's City & West End Developments has let its 7-9 Portland Place to IT company Interoute. The deal for the 985 sq m (10,600 sq ft) office - signed just eight weeks after the building's completion - is £376.74/sq m £35/sq ft) for 25 years. Saxon Law and DTZ Debenham Thorpe acted for City & West End; Blatt & Co acted for lnteroute.

Patrick Despard has put ITN's landmark London HQ under offer in a late bid against UK property companies and private overseas bidders. If the deal completes it will be the second coup in under a month for Despard's City & West End Developments.

The 23,225 sq m.(250,000 sq ft).Foster & Partners-designed building at 200 Gray's Inn Road, WC1, is occupied by ITN, Reuters, Channel 5 and the European and Sunday Business newspapers and is valued at around £80m-£85m.

It is understood that Minerva, a private Israeli investor and at least one UK life fund bid for the property.

One City source said some of the bidders had been working on the purchase for months and were stunned by the late arrival of City & West End.

The distinctive glass-clad building - well known for its appearances on News at Ten and Channel 5 News - was built by Stanhope, and bought by ITN in 1993 for a reported £77.6m. In 1995, ITN conceded that it might sell the building and lease back the space it needs.

City & West End wasn't seen as a serious contender for the building until it received equity backing from US-based Security Capital (News, 27 March). It is understood that City & West End has £450m to invest and the ITN building is at the top end of the lot-size range it would consider.

It previously paid £28m for Pillar's 7 Clifford Street, W1 and around £30m to Prudential for the development opportunity at Cleveland House in St James's.

Market observers believe that a flood of US money is poised to hit the UK as Real Estate Investment Trusts and venture capitalists seek opportunities outside North America. While they have hit the headlines in the hotel sector, only a few players have moved into mainstream property: Security Capital, via City & West End Blackstone, via Moorfield and Warburg Pincus, via Argent and more recently Robert Laurence's Resolution Property.

The other player expected to come in is NorthStar Capital, set up by ex-Apollo partner Edward Scheetz and ex-Goldman Sachs partner David Hamamoto.

Jories Lang Wootton advised ITN.