Soho Estates has scrapped plans for a boutique Armani hotel at the famous Foyles bookstore on Charing Cross Road in favour of a flagship 250,000 sq ft office scheme.
The property company founded by the late porn baron Paul Raymond has instructed Soda and MATT Architecture to draw up plans for a 250,000 sq ft block at 111-117 Charing Cross Road, WC2.
According to a source close to Soho Estates, the firm wants to more than treble the existing 80,000 sq ft space to include retail on the ground floor, with offices in the basement and upper levels.
The office scheme would be the biggest in the Charing Cross pipeline to 2016, and help to ease an expected supply shortfall.
Soho Estates’ proposals, which it is expected to lodge next year, come after talks that began in February for Italian fashion house Armani to open a hotel at the site collapsed after the parties failed to agree on pricing.
Others developing space nearby include Great Portland Estates, which is creating 217,000 sq ft of offices at Rathbone Place, W1.
According to Knight Frank, the Soho, Fitzrovia, Bloomsbury and Covent Garden markets have seen just 1.4m sq ft of speculative office-led schemes started and delivered over the past five years. The West End vacancy rate is 4.5%.
Patrick Scanlon, partner, central London research at Knight Frank, said: “Forecast strong take-up and the continued lack of funding for speculative development suggests the pipeline in the West End will struggle to keep pace with demand over the next five years.” He added that the arrival of Crossrail would likely trigger more demand.
Soho Estates posted £28.7m turnover for the year to 31 March and pretax profit of £19.6m, up from £23.7m and £16.3m respectively, in its results this week.
