Who owns Princes Street?

IT is one of the world's most famous streets, attracting millions of visitors every year.

Princes Street is home to some of the country's best-known high street names, ranging from McDonald's to Jenners, Boots the chemists to Ann Summers.

• Click here to open PDF map showing Princes Street property owners

Yet behind the facades, surprisingly little is known about who owns Princes Street.

Those who work with these wealthy owners are largely reluctant to speak, unwilling even to identify them publicly for fear of breaking the discreet protocol of the big money property dealers.

It is possible, though, to piece together a comprehensive picture of who owns what, with the help of land ownership records and property industry insiders.

The picture that emerges is a world dominated by multi-billion pound investment funds, but also featuring a smattering of wealthy families and individuals, including the Queen.

It offers a fascinating insight into the real life monopoly game which mega-wealthy Arab oil sheikhs are considering playing – as they weigh up plans to try to buy every building on Princes Street's north side.

Representatives of the cash-rich "sovereign funds" of some Middle East states are in talks with the city council about the possibility of such a massive investment. The funds are looking for major investment opportunities which would generate income once their oil runs out.

Property experts believe it would cost somewhere in the region of £1.5 billion to buy the whole street.

The biggest player on Princes Street – owning a series of buildings, housing seven stores and worth at least £20m – is the investment management firm PRUPIM. The global group manages more than 1000 properties across North America, Europe and Asia, worth more than £20bn. It is the only one of the current owners to have built up a portfolio of more than three Princes Street properties.

Others with significant stakes include a range of pension funds, including ones providing for the future of former miners, farmers and Nottinghamshire council workers.

The Queen – who owns the Game computer shop and Waterstone's buildings through the Crown Estate and its commissioners – is undoubtedly the best known Princes Street property owner.

The Douglas Miller family have kept a stake on the street despite selling Jenners to the House of Fraser – they still own the Mount Royal Hotel.

Business tycoon Sir Philip Green, through his Arcadia Group, is one of the few owner-occupiers on the street, with brands including Top Shop, Burton's and Dorothy Perkins, in his building at number 30-31.

The various owners, and their differing objectives, will make any attempt to buy up the entire street – or even significant stretches of it – tortuous.

Industry experts say it is easy for a wealthy investor to buy their first two properties on Princes Street, but by the time they move for a third the word is out.

Once other owners know the "new kid on the block" is trying to build a significant portfolio the asking price goes up.

Alasdair Humphery, director of capital markets at investment and property firm Jones Lang LaSalle in Edinburgh, estimates the total value of all the buildings collectively would be around £1.3bn, if they were sold individually at their current market value.

However, anyone wanting to buy a significant stretch of the street, never mind the entire parade, would have to pay significantly over that price, he warns.

"These parties have widely varying objectives. It is highly unlikely that you will get them to act in unison as every building is different, leased to a variety of traders on differing lease terms," he says.

One major problem for any potential mass buyer would be tempting some of the pensions and investment firms to sell up.

Property on Princes Street is highly desirable to them as an investment which promises a steady income and a sizeable asset on their balance sheet. The attraction of a steady rental income means some are even reluctant to develop their properties – and lose a few years of lucrative rent – even though it would ultimately add to their value.

A source close to one of the firms said: "They are an investment company, they hold on to these buildings as part of a fund, or on behalf of their clients. They wouldn't want to develop them, that's not in their interests."

Yet, despite the difficulties, there are likely to be plenty of opportunities for the Arab investors – or any other prospective buyers – to test the water.

In the last year, between ten and 15 properties are thought to have changed hands on Princes Street. It is impossible to know exactly as some deals are done privately and not made public until the official Land Registry records are updated many months later.

The T-Mobile store at number 21 sold last week for an undisclosed sum to an as yet unnamed buyer. The Orange shop at 133, which recently failed to sell at auction, is expected to be one of several to come on to the market in the coming months.

The city council has been in talks with developers, including representatives of the oil-rich funds set up by countries in the Middle East, about buying into their vision for the street.

The council wants to see Princes Street developed into a series of distinctive blocks, which collectively it describes as a "string of pearls".

Councillor Tom Buchanan, the city's economic development leader, says: "We've got to find out which owners want to work with us within the masterplan.

"I would hope that they will see the sense in developing out to get more profit in."

One of the keys to the council's argument is getting the largely unused upper levels into use, increasing the owners' rental income.

Redevco, which revamped the old C&A building, did exactly that.

Simon Smith, Redevco's managing director, believes others will follow their lead.

"The principle of bringing the top floors of buildings back into use is an excellent one," he said.

"Princes Street is such a strong location in the UK and in a global context that there will always be investors and developers wanting to do things.

"We would be very interested if we could find something we like, and that we can see a future in on a medium-long term basis."

Proof that it's possible to turn a beast into a beauty
WALTER SCOTT has shown that it is possible to buy up huge swathes of property in one prestigious Edinburgh location.

The chairman of fund managers Walter Scott & Partners started buying up and revamping properties in Charlotte Square in 1995, with the aim of re-establishing the square as the city's financial hub.

The square had slipped into a decline in the early 1990s when many of Scotland's leading professional services firms, including Shepherd & Wedderburn, Baillie Gifford, and Dundas & Wilson, began to move out.

Mr Scott thought it was disgraceful that many of the properties in the area had been allowed to fall into a dilapidated condition and claimed it was possible to turn them into top class offices.

His dream was to restore the square to how Robert Adam designed it and make it the best Georgian square in Europe.

He eventually bought and restored numbers 1-4, 9, 15-17, and 44-46 in the Square at a cost of more than £35m, establishing his own office in one of the renovated properties.