He may still have more than 300,000 sq ft of space to let in the Heron Tower, but it has been a pretty good year for Gerald Ronson.
In January, he was honoured by the Queen in the New Year’s Honours List with a CBE, completing his professional rehabilitation after being jailed for his part in the Guinness scandal of the 1980s.
In February, Ronson’s 46-storey Heron Tower, EC2, secured another tenant in the shape of professional services group Harvey Nash, which signed a £10m lease, pushing the 460,000 sq ft tower to beyond 33% occupancy.
This week it added to that by signing European credit investment manager Avoca Capital.
In March, it was revealed that Ronson’s property company Heron International was close to filling the 98,000 sq ft Peak building in Victoria, SW1, with a letting to US investment manager Guggenheim Partners.
Then, last Thursday, came the glitzy topping out ceremony of his latest venture – The Heron: a 36-storey luxury residential-led skyscraper next to the Barbican, EC1, and the latest in a line of London landmarks to be named after Ronson’s eponymous property company.
Coming just one day after the Office for National Statistics confirmed that Britain’s economy had gone back into recession, you might have expected Ronson to have had a few concerns about the timing of this latest scheme.
But the blunt soon-to-be-73-year-old is quick to point out that the block of 285 flats, which also includes a new home for the Guildhall School of Music and Drama, is already 80% pre-sold, with still a year to go before construction is complete.
“I think the new recession hasn’t made any difference to the old recession,” says Ronson, showing Estates Gazette around a bijou £450,000 studio apartment show flat at The Heron. “All it really tells you is that everything is flat. London is not flat. But if we take the country as a whole, it is very flat.
“London is still a metropolis, the greatest city in the world,” Ronson adds, warming to his theme. “You’ve got everybody coming to London, from the Middle East, the Far East and Europe. People have come from Greece, Italy, and now France, because they want to have a home in London.”
According to Ronson, values at the scheme have grown from £1,000 per sq ft to up to £1,700 per sq ft. By the time the building is finished next year, he speculates that the upper floors and penthouses might be able to achieve £2,500 per sq ft. And, despite his comments about the swathes of foreigners looking to buy in the capital, Ronson says that 60% of the apartment sales have been to British buyers.
The Heron bears the distinction of being the City’s first major residential development in 30 years. The City Corporation, which jealously guards against any incursions into the Square Mile’s office stock, partnered Heron on the scheme, which is built on the site of a former fire station.
“There is no building of residential per se in The City of London, so it’s a unique project,” says Ronson. “We were confident right from the beginning that if we created the right product, architecturally, we would sell the units. We are not even marketing at all right now. The penthouses and those top apartments, we won’t even start marketing until September at the earliest.”
Nonetheless, Ronson is adamant that building City flats is not the sort of job any old developer could put his hand to and succeed at.
“Although it all sounds very simple, this is not building commodity space, this is building a very specialised lifestyle – luxury, very highly finished accommodation,” he says. “This is a very small apartment, but you look at how usable it is and how it’s well designed. You’ve got a large balcony which you can sit out on in the summer, etc. It is a very specialised business. This is not a business for amateurs.”
Spurred on by The Heron’s success, Ronson is already working on more residential space in the City. Heron is in the process of developing another 120 flats next door to the Heron Tower on Bishopsgate, EC2. It is also understood to be among the companies vying to develop the 50-storey residential tower that forms part of Hammerson’s Principal Place scheme in City fringe Shoreditch, EC2.
“We look at London because it is our home town,” says Ronson. “London is where we develop and our expertise is. So should there be opportunities that are economically viable, then obviously we are looking at them and would want to move forward.”
So, how does Ronson feel his flats will fare in comparison with those being developed by long-time business rival Irvine Sellar at the Shard?
“I think they are completely different products,” says Ronson firmly. “I think there’s something like 50,000-60,000 sq ft of residential right at the top of the Shard. I don’t even think the Qataris will sell it, I think they will lease the space, similar to what they are doing with Park Place in the West End. I don’t really concern myself with what other people are doing. I am only with concerned what we are doing and it is a totally different product. It is a different location completely, the size of the units is different, and so on.”
But, despite his confidence in the London market, Ronson, like all other developers brave or foolhardy enough to keep building through a recession, has a tough couple of years ahead of him. He still faces the uphill struggle of finding tenants for the remaining two-thirds of his high-profile Heron Tower.
“London is London. We’re all very fortunate that we live here,” says Ronson, “because it’s a lot different from Manchester, Liverpool or Bradford.”
To watch a video of the interview, visit www.estatesgazette.com/videos
Ronson’s Saturday job
Aside from developing large London property schemes, Gerald Ronson has also spent the years since the global economic downturn building up an empire in the industry that made his name back in the 1960s.
Ronson is famed for spending his Saturdays managing a portfolio of nationwide petrol service stations – a business he has been running since 1966.
Ronson’s Snax 24 is a successor to Heron Service Stations, which he set up in the 1960s and with which he made his first fortune importing the idea of cheap self-service petrol to the UK from the USA.
“Petrol is my ‘fuck you,’ business,” Ronson famously says in his autobiography. “If everything else goes wrong, I can always continue to live my lifestyle pumping petrol.”
Last year, he made the decision to expand his petrol empire. In June, a Ronson-led consortium, Rontec, comprising Snax 24, along with Investec and London-based investment group Grovepoint Capital, purchased a portfolio of 810 properties from French oil company Total for around £350m.
As part of the deal, Ronson then agreed to sell 254 sites to Royal Dutch Shell for £240m (although it continues to operate them) and later sold another 300 sites to Energy company DCC for £54.5m.
The deal means that Ronson now controls around a tenth of the UK self-service petrol market, and increases the number of petrol stations owned by Snax 24 15-fold from 84.
Ronson says: “I invented self-service petrol stations. I have been in the business for 46 years and I have built [up a portfolio of] nearly 1,000 petrol stations.”
