Sunday , July 3 2022

Britain’s Old War Office Will Soon Become a 5-Star Raffles Hotel

LONDON — From his office at 10 Downing Street, Prime Minister Boris Johnson of Britain places urgent daily calls to Ukraine’s wartime leader, Volodymyr Zelensky. Next door, in the Foreign and Commonwealth Office, officials draw up new sanctions against the Russian oligarchs who have turned London into a turnkey haven to hide their assets and house their extended families.

And yet just across Whitehall, a billionaire property developer is close to completing an extravagant conversion of the Old War Office, an Edwardian-era monument to Britain’s imperial past. The new property will be a five-star Raffles Hotel, with lavish residential apartments that would until recently have catered to the same ultrawealthy Russians who have abruptly fallen out of favor.

“We had a glut of Russian inquiries about six weeks ago, none of which materialized,” said Charlie Walsh, the head of residential sales for the project. “The Russian market would have been quite significant. For obvious reasons, that has been completely nonexistent. Thankfully, from that point of view, as well.”

To say the project has strange timing understates its sheer incongruity. Opening at a time of war in Europe, the OWO — as the Old War Office has been delicately rebranded — is an evocative reminder of Britain’s wartime history. In the midst of a crackdown on rampant foreign money, it is also a baroque example of what postwar Britain has become, and what the government is belatedly trying to clean up.

Rarely has a building been both so emblematic and yet so out of step with the times — a bricks-and-mortar manifestation of how London has, and hasn’t, changed.

The crosscurrents are not lost on Mr. Walsh, who works for the Hinduja Group, an Anglo-Indian conglomerate controlled by the Hinduja brothers, which has holdings in automotive manufacturing, oil and gas, and health care. He is trying to sell the building’s rich history to a superrich clientele without overdoing the warlike theme.

Instead, Mr. Walsh recalls the famous figures who worked in the Old War Office, from Winston Churchill to T.E. Lawrence, a.k.a. Lawrence of Arabia. He confides that John Profumo, the secretary of state for war in the early 1960s, entertained his 19-year-old lover, Christine Keeler, in his wood-paneled office, which will be the centerpiece of a hotel suite. Their fling exploded into the “Profumo affair” after it emerged that Keeler had also had a sexual relationship with a Soviet diplomat.

Ian Fleming was in and out of the building during his time as a naval intelligence officer — a detail that is catnip to a salesman like Mr. Walsh, who hints that Fleming came up with the inspiration for his suave spy, James Bond, there. He shows a visitor the “Spies Entrance,” so-called because it is tucked discreetly at the rear of the building.

Numerous Bond films have used the Old War Office as a backdrop, most memorably at the end of the 2012 film “Skyfall,” when a brooding Daniel Craig gazes at its domed turrets from the roof of a neighboring building — Big Ben looming in the distance, framed by fluttering Union Jacks.

“Hate to waste a view,” Bond says, in words the developer has manifestly taken to heart.

The OWO is full of jaw-dropping vistas, with suites that look out to the Horse Guards Parade across the street, or south to the Houses of Parliament. There is a three-story champagne bar overlooking a courtyard and a glass-roofed restaurant. Two of the penthouse apartments have rooms built into the turrets.

All that splendor — the wood paneling, the intricately carved marble fireplaces, the original mosaic floors — isn’t cheap. The 85 apartments start at 5.8 million pounds ($7.6 million) and go up to 100 million pounds ($131 million). Mr. Walsh has sold about a quarter of the units and said he was confident he would sell half by the time the OWO opens at the end of this year or early in 2023.

The war in Ukraine, and the stain of hidden, ill-gotten Russian wealth, is not even the biggest challenge to marketing these oligarch-scale apartments. Travel restrictions stemming from the coronavirus pandemic have made it harder for prospective buyers from Asia and the Middle East to visit London. As a result, many of Mr. Walsh’s early sales have been to Americans and Europeans. The spike in oil prices, he said, will probably help lift the market for buyers in the gulf countries.

Though he does not say so explicitly, Mr. Walsh is clearly relieved that Russian buyers have been sidelined. The threat of sanctions, which could lead to their assets being frozen, spares him a difficult choice. He insists that more stringent “know your customer” regulations in the last few years have made it “nigh on impossible for dirty money to come into these new projects.”

That seems optimistic: Transparency International, which campaigns against corruption, estimates that 6.7 billion pounds ($8.8 billion) of dubious foreign funds have poured into British property since 2016, including 1.5 billion pounds from Russians accused of corruption or links to the Kremlin. A new law aims to make it harder for wealthy foreigners to disguise their ownership of real estate or use it to launder money.

Despite this crackdown, and the complications of Brexit, Mr. Walsh predicted that London would remain an alluring destination for the superrich. Two years of pandemic — of “not being able to exercise their retail therapy,” he said — had generated pent-up demand for multithousand-dollar-a-night hotel rooms and multimillion-dollar apartments.

The Old War Office, which was completed in 1906, is not the only London landmark that is being converted into a luxury hotel. The Admiralty Arch, which sits between Trafalgar Square and The Mall, is being turned into a Waldorf Astoria. The former United States Embassy on Grosvenor Square, a midcentury-modernist classic designed by Earo Saarinen, is being converted into a Rosewood Hotel.

For critics, private takeovers of public buildings have gone too far, particularly in the case of Admiralty Arch, a majestic edifice that has languished for years as a construction site, blighting the view toward Buckingham Palace.

“It’s an absolute scandal,” said Simon Jenkins, a columnist for The Guardian and the author of “A Short History of London.” “It should be used for government offices. Are they going to do Downing Street next?” (A smart-aleck might note that the prime minister’s residence was regularly used as a party space during the pandemic — a violation of lockdown rules that has put Mr. Johnson into political peril.)

Selling off distinguished public buildings for hotels or high-end apartments would be hard to imagine in a city like Paris. But in London, “a dispassionate approach to the great buildings of state is not as strange as it would seem,” said Tony Travers, an expert in urban affairs at the London School of Economics.

“Britain, which is a very traditional country in many ways, has the capacity to be very untraditional in other ways,” he said. “There’s a willingness to reject tradition when it is seen as pragmatically necessary.”

Mr. Travers pointed out that a fiscally strapped government was unlikely to take as good care of these buildings as private owners. The Palace of Westminster sits in a state of dangerous decay, with chunks of masonry tumbling off its walls, as Parliament bickers over a renovation that could take decades and cost more than $20 billion.

The Ministry of Defense, which moved into larger quarters in 1964, sold a 250-year lease to the Old War Office for 350 million pounds ($460 million) in 2016. The Hindujas have poured more than one billion pounds into it, with 1,200 workers laboring on the site.

“This is a very expensive capital-intensive project,” Mr. Walsh said, as he showed where a Versailles-scale chandelier will hang over the grand staircase. “Without private investment, very simply, these buildings would be left to rot and die.”


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