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German with £2 billion stake in London property has murky record

German owner of some £2 billion worth of property in British capital has reputation for neglecting his buildings and bullying tenants

PUBLISHED : Monday, 12 May, 2014, 9:19pm
UPDATED : Tuesday, 13 May, 2014, 3:18am
 

A German landlord with a reputation for shabby buildings and disgruntled tenants has emerged as one of the biggest investors in London property in recent years.

Henning Conle, 70, has snapped up almost £2 billion (HK$26 billion) worth of prime real estate, including a series of historic buildings in central London, raising questions about where he got his money.

The portfolio includes buildings that house department stores such as Liberty and House of Fraser, the Kensington Roof Gardens complex, the London offices of Manchester United, and the art deco Shell Mex House on the Strand.

Little was known before about Conle and his Luxembourg-registered Sirosa company. When the Shell Mex deal was concluded for a reported £610 million last year, reports erroneously identified the buyer as a German family named "Conley".

Conle has a somewhat tarnished reputation in Germany, where he is thought to own more than 10,000 properties.

In Hamburg, where at one point in the 1990s he owned up to 2,500 flats, newspapers used to call him "the phantom" because of his apparent lack of interest in looking after his properties.

Tenants complained about crumbling buildings and bullying tactics. In 1998, a Hamburg court ruled that Conle had used illegal methods against tenants who were late with their payments, leaving threatening notices up in public hallways.

There has been speculation that Conle may be investing money from other clients, possibly from Russia, but the landlord denies this.

In a statement, he said: "The properties [in London] were financed by means of bank credits and capital resources. It is untrue that the purchases were carried out as a facade for investors from Eastern Europe."

In London, his growing empire is attracting notice in the property industry.

"The name Sirosa was one of the names most spoken about in the central London real-estate market last year, yet one of the most below-the-radar firms," said Joanna Bourke of Estates Gazette, a trade publication.

In the Ruhr region where Conle grew up and still owns many properties, former tenants also complain that buildings were neglected.

Annette Klovekorn lived in a Conle flat in Duisburg in the 1980s: "The state of the apartment was a catastrophe: about eight wallpapers had been stuck on top of one another, plaster was drizzling from the ceiling. Every year, Conle asked for about 100 Deutschmarks for repairs which were never made."

Thirty years later, the same building is still in disrepair. "Don't invest anything in property and squeeze as much out of it as you can: that's the Conle method as we've got to know it," said Peter Hess of the Duisburg region's tenants association.

However, the properties Conle has bought in London are all period buildings, four of them heritage-listed.

The listed Liberty department store on Regent Street, which Conle acquired for £41.5 million in 2010, is one of the best-known mock-Tudor buildings in Britain. Others, such as Barkers department store on Kensington High Street, are classic examples of art nouveau architecture.

Responding to allegations of neglect concerning his German properties, Conle said: "There are no significant allegations regarding conscious negligence or illegal methods."

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