Copyright: David Lawson - first published Property Week August 2005
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The property industry practically closed down this summer. Uncertainty following the London bombings overlaid an unusually severe seasonal lull, blamed on the desperate need to get away after yet another year of frenetic business. Many found themselves exchanging one crowd for another at strike-hit airports and clogged beaches, but one group of property veterans is looking beyond the queues to what could become the ultimate escape.
You can’t get much further away from it all than Saint Helena, a tiny speck in the South Atlantic so remote that it was the only place considered secure enough to exile Napoleon for the last years of his life. Getting to this far-flung remnant of the Empire, some 2,000km off the west coast of Africa, involves a long flight to Cape Town then five days on the single ship which visits the island 25 times a year. In emergencies, there is an RAF base in Ascension, but this is two days away.
Squeezing international jets into a mere 122 sq km of land has been impossible until recently and plans are now in place for an airport. This could open the door to a development which will be a signpost for a vital new trend in tourism. In a shrinking world there are precious few places left to escape, and most of those are locked away by ecological concerns. Saint Helena might appear among the most securely bolted, with an ecosystem so isolated that it attracted Darwin.The downside of being one of nature’s gems, however, is that jobs are scarce. Like so many isolated areas, locals are leaving in droves. Only 5,000 remain, and as UK citizens, their future - as well as the rare flora and fauna – lies squarely in the hands of the UK government.
Yet a group of private sector investors has come up with a solution – an ‘eco-development’ which could provide a vital 300 jobs, kickstart revival of the dying economy but still protect the environment. Sir Nigel Thompson fell in love with the remote island half a century ago after stopping on the way to Africa on one of the liners that used to call before the days of international jets. It remained a fond memory until a phone call out of the blue from Robert Jones, a lawyer with Berwin Leighton, asking if he was interested in becoming involved in a rescue mission for the island. This was a meeting of mind and passion. As deputy chairman of Ove Arup, he has the engineering clout for the mammoth task of planning and creating a major development where everything will need to be imported. But is also a dedicated environmentalist, chairing one of the most powerful ecology bodies, the Campaign to Protect Rural England [CPRE].
The combination cropped up time and again as more property names joined Shelco, a special purpose company set up for the development. Peter Kershaw and Peter Allport, a partnership that created the HQ Global chain of managed business space, are active investors. Chief executive Alasdair Thomson is another surveyor with a pedigree including Marples Holdings and numerous international development projects. David King, a Stanhope founder and leading player with Interior and Stonemartin, is another in what Thomson calls Shelco’s ‘collegiate management’. So is Charles Sanderson, widely credited with inventing Canary Wharf when he drew up the original ideas while at Savills, who now scatters billions across the world by advising funds such as Pradera.
Why is such a potent economic force so passionate about a tiny speck in a storm-tossed sea the other side of the world? ‘We have all made a lot of money from property,’ says Kershaw, whose wallet was stretched even further recently when Morgan Stanley paid £220m for HQ Executive Offices.’ This is about giving something back.’
Saint Helena is no charity case. A 300-room hotel, around 50 villas and a golf course should produce hefty returns from wealthy travellers looking for the ultimate retreat. The island’s government also offers long tax holidays and there are neither property nor employment taxes. No-one is revealing total costs but estimates of between £40 and £70m has been bandied around just for the airport. The fact that the consortium was ready to pay not just for this but establish an airline shows the economics must be robust. But you get the feeling these powerful, wealthy people could make a lot more money via conventional investment. And a lot more quickly. The government has stepped in to insist on paying for the airport. Ministers are happy to foot the bill as it will save shelling out even more to replace the ageing supply ship and meeting soaring subsidies to support an equally ageing population stripped of young emigrants.
But this has added extra time for administrative procedures and tender competitions. Sir Nigel was hoping guests would into the hotel by the end of next year. Now he admits it could be 2010 before visitors begin to arrive. But everyone seems happy to endure the wait because they believe the end result justifies any frustrations. Shelco has an option on 400 acres and another 50 for expansion. Plans include a luxury hotel run by Obreroi – formerly East India Hotel Co, so an apt choice as this harks back to the legendary trading group which founded the island community. But this will be part of a massive programme of ecological works and nature reserves including market gardens and orchards which supply guests with organic food and kickstart revival of the agricultural economy.
Kershaw is keen to set up a trust with Eden Centre, the West Country ecology specialist which is feeding expertise into the operation, to train Saints – the term for locals. They are a key part of the plan. ‘This is not just an economic or an ecological operation,’ says Thomson. ‘It is about reviving and supporting the community.’ Apart from senior managers, Thomson sees Saints running the whole operation, enticing many young expats back from abroad, where they have been driven to find work. The Saints Are Coming In could be a fitting anthem to welcome for the first planeload home.
But the fate of Saint Helena could have wider significance. Along countless coasts, economic regeneration for mass tourism has destroyed the very attractions that brought in visitors. Planners are now looking more closely at low-volume, high-return solutions for remaining remote areas where jobs and ecology make conflicting demands. Saint Helena was never going to be a mass resort, even with an airport, as it has no beaches. But the remoteness could itself is a draw for wealthy travellers. The villas are likely to be snapped up long before a brick is laid, with the prospect of golfing in one of the world’s most exclusive surroundings and easiest climates. ‘Think West Highlands of Scotland,’ says Thomson. ‘But without the midges.’ It could also show how the business community can put money back into the environment and still come away feeling enriched.