The company of a property tycoon and Conservative benefactor has bought from the Government, in a joint deal with Qatari Diar, a large chunk of the Olympic Village, a brand new development built specifically to house athletes at the forthcoming 2012 Olympic Games, a few months after making a reputed £50,000 donation to the Conservative Party.
Jamie Ritblat, Chief Executive of property giant Delancey, has reportedly bought a significant part of the Olympic Village for £557 million, despite that section of the village actually costing an estimated £832 million to construct. As this was constructed under government funds by the ODA (Olympic Delivery Authority), this could be seen as equating to a loss of £275m to the British taxpayer.
The company is reputedly planning to let out the 1,400 homes, after the Olympics, and stands to make huge profits, despite the need for major refurbishment due to a lack of kitchens in any of the properties.
Critics have also highlighted the presence of Jamie Ritblat’s father, Sir John Ritblat (of British Land), on the Conservative party’s Olympic Oversight Committee as a possible reason for the acceptance of such a low offer, but supporters of the deal argue strongly that it was simply the best offer on the table in a difficult time for investors.
The revelation that Delancey had donated £50,000 to the Conservative party in both May of this year and the last has, however, further muddied the water. Val Shawcross, Labour member of the Greater London Authority, commented:
“This transaction needs to be closely looked at. In public life the appearance as much as the reality needs to be considered. The public need to know that this was an honest deal and if or to what extent donations to the Tories affected it.”
The Delancey offer beat bids from Hutchinson Whampoa and UK medical charity the Wellcome Trust.
The ODA spokesman stated:
“The bids received from three short-listed bidders were assessed in terms of their long-term plans for the development and on delivering value for money against the public investment in the village – no other factors were considered.”
The sale of the Olympic Village is part of a wider scheme by the Government to regenerate a deprived area of London. Of a total of 2,818 homes in the village, 1,379 have already been sold to Triathlon homes to be converted to affordable housing. The remaining 1,439 will go to Delancey and Qatari Diar and will be converted to private rented accommodation. Their deal also includes six adjacent plots which provide room for a further 2,000 potential homes.
More information on the Olympic village can be found on its own website, here.