The new anonymous owner of Dolphin Square has transferred its ownership of London’s iconic landmark building from Jersey to Luxembourg following its sale by last year by  the American managers, Westbrook, which earned the owners a tax-free £150 million profit.

As we revealed in our last update, the Jersey-registered owner, The Dolphin Square Estate Limited, was dissolved last December after its acquisition by clients of Axa Investment Management. The identity of the beneficial owners of the new corporate entity has not been revealed.

In a circular to tenants, the general manager of Dolphin Square, Neil Miller-Chalk, revealed last week that “the landlord in essence remains the same company, but now based in Luxembourg and with the title amended to Dolphin Square Estate SARL.”

Mr Miller-Chalk, who is well-known to long-standing tenants for his ferocious-looking dog and rise from humble origins in the catering department, is clearly not aware of corporate law. Through the transfer, the new owners will shed all liabilities and claims that the company had in England or Jersey and the new entity will have all the continued secrecy and taxation benefits within Europe and outside of the English jurisdiction. Clearly, Mr Miller-Chalk also does not understand the fact that the new owner is a completely separate entity from the owner during  Westbrook’s management. And the identity of the beneficial owners remains unknown.

Tenants of Dolphin Square believe that they are entitled to know the identity and financial resources of the new owners of England’s biggest residential building with its 1,250 flats and want to be confident about the owners’ long-term repair and other plans which they consider are vitally important for their own long-term security. 

A further cause for concern came when tenants were notified last week that their rent should  be paid in future to a new company, Dolphin Square Operation Limited, which they were informed was taking over the management of the property from Dolphin Square Limited, the manager since the purchase of Dolphin Square by Westbrook in 2005. The new company is registered in England and has the same directors following the sale  as the previous company, which was registered in Jersey, being Federico Faravelli and Joe Persechino, both Axa executives based in London.

Companies House records filed last year show that Dolphin Square Limited was massively insolvent with debts of more than £50 million and annual losses running at more than £4 million a year. Its main business, apart from the collections of rents, was the operation of the Dolphin House hotel.

The hotel operation has been opposed by both residents and neighbours  of Dolphin Square as a nuisance within a residential area and at the time of the planning appeal against Westbrook’s unsuccessful redevelopment plans was said to be the object of council enforcement action. Clearly such plans have not succeeded since the hotel has been operating in the guise of nightly service apartment rentals during the pandemic.

Filings at Companies House by Dolphin Square Operator Limited show that it has been established with an issued share capital of  £4.4 million. To put this in perspective, this sum equates to the annual losses of the previous management company which employed, according to its own company records, around 85 people.

The same records also show that the new management company has assumed responsibility for the £514 million mortgage granted by M & G Investments, the English fund manager, to Westbrook and that this loan was not repaid on the sale. There are two charges on the assets of the company by CBRE Loan Services, a loan manager, one for the tangible assets being the land and buildings and the other for the intangible assets. This confirms reports on the sale that Dolphin Square had been acquired for a nominal consideration and raises concerns about the financial ability of the new owner to carry out the urgent structural repairs needed to the building with costs estimated by surveyors to be around £100 million.

This information also raises great concern among tenants about the financial stability of the new owner in the light of the fact that central London property values are known to have fallen by around 50% since the peak of 2016 and rental values have fallen by at least 20% in the same period and the fact that more than half the flats in the building appear to be vacant.

Tenants were pleased when they wrongly thought that Axa, a respectable and strong insurance company, had purchased the square. The sudden realisation that this was not the case and the appearance of emotive Italian names in the top management of the company has only raised their fears in a quintessentially English property. They would be very relieved to know the identity and resources of the ultimate owner and believe that it is their right to know. We urge Axa Investment Management, which is registered in England, to disclose this information without further delay as a matter of public interest.

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team@savedolphinsquare.com