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City&Country: Harry Handelsman is making a difference

The Manhattan Loft Corp (MLC) CEO Harry Handelsman is a driven man, and he loves his work in property development. “There is an opportunity to make a difference. Change a cityscape, you change the landscape, and you change the way people live,” he said in a candid interview at the CB Richard Ellis (Malaysia) Sdn Bhd office late last year.

Handelsman, who currently lives in London, grew up in several countries — Germany, Belgium and Canada. In Toronto, he did his master’s in economics at York University and eventually started his career as a financial backer in New York. It was there that the seed of property development was planted, and it slowly grew as he developed his eye for interesting property and modern art. It was also in the city that never sleeps where he encountered lofts for the first time. But it wasn’t until he moved to London in the early 1990s that he started developing them.

Handelsman’s venture into property development came by chance, when a project he was financially backing in the UK went bust due to the financial crisis of the late 1980s. The development was about 90% completed, and not wanting to lose any more money he decided to complete it himself. As a result, he got caught in the day-to-day business of construction. “From adversity, I built up a bit of knowledge in development,” he said.

From there, he moved on to develop lofts in former industrial buildings. His first was on Summer Street in Clerkenwell. Handelsman spent £435,000 (RM2.4 million) on a 1930s print works building at auction, valued at 20% of what it had been worth three years before. He then created 23 loft apartments in the building and sold them for £75,000 to £245,000 each. These were soon sold out. Handelsman further solidified his “lofty” status with other loft developments in Soho, Bankside, Shoreditch and West India Quay.

Chelsea Apartments
Handelsman’s trip to Southeast Asia last year, his first to Malaysia, was to introduce his latest development, the Chelsea Apartments. The 6-storey structure will stand at the corner of Fulham Road and Hortensia Road in the Chelsea district. It is jointly developed with MLC and Trevor Osborne Group. Dixon Jones, known for their work on some of London’s cultural landmarks such as the Royal Opera House and the National Gallery, are the architects.

Currently under construction, the development sits on about 0.7 acre, and will comprise 24 one, two and three-bedroom apartments and one penthouse on the top floor. The sizes range from 713 sq ft for a one-bedroom unit to 1,292 sq ft for three bedrooms. Prices start from £750,000. The penthouse was reported to be going for £8 million and features a private entrance, three bedrooms with attached bathrooms and staff accommodation.

The gross development value of Chelsea Apartments is £35 million and rental yields are estimated to be 4.5%. A management team will help manage units purchased by overseas buyers. The development is slated for completion by the end of 2010. CBRE and Savills in the UK are joint agents for the Chelsea Apartments.

Seven units were introduced in Southeast Asia and to date five have been taken up.

Handelsman said that the site of the Chelsea Apartments is the former car park of the Chelsea Art College. The college needed financing for a new building and sold the land on which the college currently sits along with the car park. Once the college’s new building is ready, its current premises, a Grade 2 listed building, will be refurbished by MLC into an apartment block. A Grade 2 listed building is a building of special architectural or historic interest. There are specific guidelines as to what can and cannot be done to the building.

MLC evolution
Handelsman made a name for himself building lofts, but he made a conscious decision to move into other types of development. “The sad thing about life is repetition,” he said. Hence, his development firm later took on the job of restoring and refurbishing St Pancras Chambers, an iconic Victorian Gothic building which was in disrepair for many years, turning it into a 244-room luxury hotel and 67 luxury flats.

At the time of going to press, all but one of the flats had been sold, at prices ranging from £650,000 to £10 million. The first 19 flats were completed in May 2009, and their owners have moved in. The rest were completed recently.

The challenge for the developer is that St Pancras Chambers is listed as a Grade 1 building. This means that it is a building with outstanding architectural or historical interest, and any restoration must not alter its original structure.

Handelsman admits that he suffered many sleepless nights over the St Pancras Chambers project, but at the same time he was intrigued by it and the challenges it brought with its Grade 1 listing.

It was listed in 1967, after a campaign by the then poet laureate Sir John Betjeman to save it from the wrecker’s ball. “We had to recreate all the ceilings just as they were, even if all you see in the end is white plaster,” Handelsman was reported as saying in an earlier interview. The hotel portion is scheduled to be handed over to the Renaissance Marriott in October 2010 for the grand opening in Spring 2011.

Aside from this project, Handelsman is also involved in developing Fitzrovia Apartments in Fitzrovia, an area surrounded by Oxford Street, Tottenham Court Road, Euston Road and Portland Place, within central London. 

He’s also developing a hotel with New York hotelier Andre Balazs, who is known for the hotels he owns in the US such as Mercer Hotel and Chateau Marmont in Los Angeles, as well as his much-publicised romance with actress Uma Thurman. Balazs and Handelsman plan to convert the former Manchester Square fire station in Marylebone into a 33-bedroom boutique hotel slated for opening in 2012. This is Balazs’ first London project.

Harry Handelsman has risen to become one of the better-known developers in the UK. In a recent news article, he was quoted as saying, “I have never made the mistake of building anything I didn’t want to live in. I believe that we developers are responsible for what we build. It’s not just about capital and profit; it’s about the quality of life. It’s not how many units you can sell but what you’re offering.”

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 792, Feb 8 - 14, 2010

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