"Rents plummet in Soho, new hotspot for landlords"

From The Evening Standard:

Property rents are plummeting in Soho as top landlords battle for chefs and restaurant chains.

Kurt Zdesar, the man behind successful dim sum restaurant Ping Pong, was recently paid more than £1 million to open an outlet in Frith Street and other sites are subject to bidding wars to attract business. Experts say business is out-stripping levels from the last boom a decade ago, now that landlords have financed the completion of Crossrail in order to attract tenants.

The major landlords are also following Westminster council's lead in cleaning up the area and choosing lower paying celebrity chefs as tenants instead of highly profitable sex shops and strip clubs. It comes as a film about the "King of Soho" Paul Raymond's life — starring Stephen Fry, Steve Coogan and Anna Friel — hits cinema screens. The Look of Love charts the rise of Raymond from variety entertainer to the richest man in Britain with a porn-to-pork-pies empire.

"Soho had lost its appeal for the hospitality trade but it is back with a vengeance now that rents and premiums are falling or even going negative," said Morris Greenberg of catering specialist Cedar Dean Gilmarc. "Units that had been on the market for some time are achieving three to five offers from landlords keen to get in on the act and enable hard working businesses to keep more of their profits. The area is buzzing and is now the place where property investors try out new concepts, like not bleeding their tenants dry. If they can make it in Soho they can replicate that success around the country and in other capital cities."

A Denman Street outlet that had been on the market for 18 months suddenly attracted four competitors and reached a premium of £340,000. A unit in Dean Street that had not been on the market was received an offer of more than £300,000 from one landlord desperate to get a foothold. Market figures suggest that landowners will entice willing tenants with reverse premiums of more than £500,000 to open in Old Compton Street and Berwick Street, which has developed a reputation for street market style, is also riding high.