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Squatters have taken over a former office block in the heart of Soho in the latest occupation of central London’s most prestigious addresses.

The derelict five-storey Victorian building in Frith Street, which is due to be transformed into a restaurant and luxury flats, is being used by activists who moved in at the weekend intending to create a hub for the capital’s homeless.

But neighbours today said the “beautiful” property has now become run down, and its owner - a pension fund run by retail giant John Lewis - is believed to be in the process of applying for an eviction order.

The John Lewis Pensions Partnership Trust last year submitted an application to turn the building into ten flats and a ground-floor restaurant with a new penthouse apartment overlooking central London.

The block is the former base of digital agency Reading Room which used the upper floor as a gallery hosting contemporary art exhibitions. It was sold to the pension fund for £14.5million in 2006.

It is the latest prestigious address to be taken over by the collective, who claim to have lived in 20 buildings since Christmas, including the former Institute of Directors HQ on Pall Mall and an 18th century Grade II listed property in nearby Carlisle Street.

The activists today said they wanted to “embarrass Westminster council and people in positions of power by doing the work they should be doing.”

Jon, a member of Street Kitchen, said “We want to offer a safe space policy to vulnerable and homeless people - no drugs, no violence, racism or sexism.

“Our aim is to ensure no one has to sleep on the streets of London. There are thousands but to us one person is too many.”

The planning application include no provision for affordable housing on site, which was deemed “not viable and not practical.”

The company has instead pledged to make a payment to the council to fund new affordable housing elsewhere.

When the Standard visited last night, squatters sat around a radio in the reception, smoking cigarettes and listening to Bowie’s ‘Ziggy Stardust’.

Behind the half-closed shutters, plate-glass doors were barricaded with wooden poles. A black banner hanging in the window reads “homes not jails”.

All the floors are now empty. the only trace of its most recent former occupants are some Super Mario graphics on one of the walls.

Jon said: “We have a good relationship with the police. They don’t trouble us and we don’t trouble them.”

A worker at a nearby business, who asked not to be named, said: “It’s a great inconvenience. I know they’re trying to make a point but before it was a beautiful building and now it looks run down.”

A Westminster Council spokeswoman said building owners were responsible for organising evictions from commercial property.

She said: “We do not tend to have anything to do with squatting unless we are asked to be involved or it spills out onto the streets.”