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Francis Salway and Sir Philip Green
High Street clash: Francis Salway, left, is at odds with Sir Philip Green over how rents should be paid on his stores, such as Topshop

Battler Green will give no quarter in rent row

Peter Bill, Evening Standard
5 Sep 2008


The most fun story of the week is the impending clash between brash billionaire Sir Philip Green, who rents lots of shops, and strait-laced landlord, Francis Salway, who runs a company which owns lots of shops.

Sir Philip owns Bhs and Topshop, Burton, Dorothy Perkins and a lot more brands besides. he is back from holidaying in the Med, cruising around on his £32million yacht Lionheart and being snapped with Kate Moss and Sylvester Stallone.

The 56-year-old Croydon-born head of the Arcadia Group has built up his family's wealth to north of £4 billion from a small stake in property.

He lives in Monaco but flies to London most weeks by private jet, the better to oversee an empire of more than 2500 stores, many of them rented. Sir Philip can, by all accounts, be very jolly, and, by personal account, jolly rude.

Mr Cheese, meet Mr Chalk: Francis Salway is the chief executive of Land Securities and current president of the landlords' lobby group, the British Property Federation.

The tabloids do not record where he and his author wife Sarah holidayed. But this 50-year-old Rugby and Cambridge-educated man lives in a relatively modest house off Tunbridge Wells high Street, despite earning £2.88million last year.

His idea of a fun holiday would probably be a B&B walking tour in the Trossachs. Land Securities owns about 19million square feet of shop space, lots rented to Sir Philip. Salway is, by personal account, drily engaging and unfailingly polite.

Sir Philip is fed up with the ancient practice of paying landlords three months' rent in advance and wants that time reduced to one month. On 20 August he wrote to a group of Britain's biggest landlords (including Land Securities) complaining on behalf of 36 high Street chains. (One notable absentee was M&S, who aren't that keen on Sir Philip, since he tried to take them over in 2004.

He was rebuffed, it should be noted, with the help of current Land Securities chairman Paul Myners.)

On the face of it, this is a fuss about nothing. The bigger landlords appear ready to concede monthly payments. Salway's company has altered its software to allow for this to happen on new leases.

But Sir Philip and his supporters are agitating for the terms of existing leases to be altered.

The landlords' private response? "You, Mr Retailer, are a consenting adult, who signed a legal document. Break it and we'll see you in court." Owning the premises means landlords have more leverage than a hapless Taiwanese T-shirt supplier.

So, if they hang together, Green style, retailers can do very little: except of course pay just 30 days' rent on 29 September, the next quarter day the cheque is traditionally posted.

That will leave the landlords with a dilemma; take the shopkeeper to court? Unlikely. Charge punitive interest rates on outstanding amounts, a little more likely. Most likely of all is a fudge, or compromise.

Sir Philip and his fellow retailers are not only fed up about the 90 days' rent issue, they are also fed up about high service costs, the way rents are calculated, and, rightly so, about rip-off insurance charges. So there is room to negotiate.

There is a meeting on the topic between the landlords and shopkeepers next Wednesday in Francis Salway's offices on the Strand, provoked by Sir Philip, it should be said.

It would be fun to think he might pop along.

There's a three-pub treat at the architects' open house

On Saturday 9 February 1946, the writer George Orwell treated Evening Standard readers to an affectionate description of his ideal London pub. The imaginary Moon under the Water lay in a quiet side street, its solid Victorian bars populated by regulars.

They enjoyed open fires, no music, and drank draft stout drawn by middle-aged barmaids "with hair dyed in quite surprising shades", who called everyone "dear" and never "ducky."

On Saturday 20 and Sunday 21 September 2008, readers of the Evening Standard can visit the concrete acres of the Barbican, where three pubs destroyed during the Second World War will be "reincarnated".

The Palimpsest Public House project uses a £5000 arts Council grant to re-imagine these long-gone boozers by splashing the cash on an unlikely combination of "installation, yoga, graphics and creative and social activities for all". (George, lie still in your grave.) This temporary happening is part of a more solid celebration of the capital's architecture, called Open House London.

This is a once-a-year chance to peek inside hundreds of buildings, many of which are normally closed to the pubic - all free of charge. this year's theme is "architecture up Close".

Some groovy firms of architects will be opening their offices, and some will be in attendance on justfinished projects. these include more than 30 private homes. That means, dear reader, that you may yourself be able to obtain some free advice on that new extension as a bonus. Check www.openhouse.org.uk for more information.

There is also an astonishing variety of other venues which are opening their doors: HM treasury, arsenal Stadium, the reform Club, Jimi Hendrix's flat in Brook Street, Handel's home next door, the Bank of England, the Lloyds Building, a Quaker meeting house in Wanstead, the Bevis Marks Synagogue in the City.

For those people who are feeling flushed with Britain's Olympic success, there will even be regular tours of the Olympic Park - which needs to be booked in advance.

Seeking some ideal post-tour refreshment? In early 1946, Orwell lived in Canonbury Square, Islington, and was at last making some considerable beer money from the success of animal Farm in 1945. So his ideal pub is probably drawn from the best bits of several north London locals.

But Wetherspoons does provide people with a modern version. the chain owns 17 Moon under the Water pubs. there are three of them in London - including one in Leicester Square that the author of 1984 would not have wanted to be seen dead in.

It's the right plan, but the wrong time, Tim

So low is the public profile of Princess Anne's husband, Vice-Admiral Tim Laurence, that sonar rather than radar would normally prove the best method of detection. But in late July, the man who married the Queen's only daughter in 1992 surfaced to conduct an interview with estates Gazette.

About 15 months ago, after 20 years in the Navy, the lanky 53-year-old was given a big shore command - chief of Defence estates. This bit of the Ministry of Defence has over 4,000 staff and looks after 640,000 acres of land and £20billion worth of bricks and mortar, nominally owned by Laurence's mother-in-law.

The purpose of the interview was to let the property community know that the mild-mannered sailor had something to sell: in fact £1.5billion of unwanted land and buildings by 2011.

The plan involves the MoD going into joint ventures with the private sector and local authorities to redevelop 44 surplus establishments, including the old Battle of Britain hQ at RAF Uxbridge.

This is a much more sensible approach than the disastrous sale of 57,000 service-folk homes in 1996 for £1.67billion, about £29,000 each. The lucky buyer of the 999-year lease was Annington homes, a consortium of lenders assembled by financial whizz Guy hands.

Since then Annington has sold 15,500 units, the latest at an average price of £150,000. They are also currently receiving over £150million a year in rents on the remaining homes.

But the hapless MoD is lumbered with the maintenance and the bad headlines. Meanwhile, Annington boasts its £1.67billion investment is now worth £6.4billion.

So, there is this better plan. er ... just one thing Tim. This isn't really a good time to be offering suicidal developers a share of profits. Give it a couple of years.

It may soon be red faces over at HSBC

HSBC may soon face the ultimate mortgage embarrassment; a lender defaulting on a £810million loan - given by hSBC to a Spanish developer to buy the bank's own HQ.

In May 2007, hSBC flogged its 45-storey head office in Canary Wharf to Spain's Metrovacasa for a sum of £1.1billion. This was seen at the time as a great deal, done at the apex of the market, which made hSBC about £500million profit.

But the bank could not, of course, resist the conflict of interest - and went ahead and gave Spain's largest property company that whopping mortgage to buy the 210-metre tower.

This loan is due to be paid back in November. Metrovacasa is in deep trouble in Spain, where the "casa" market has collapsed.

If the Spanish firm can't manage to pay back the loan, then hSBC will be faced with the task of repossessing its own building.

It's a good job that it made £500million on the deal in the first place.

Housing help is all down to guesswork

The package of measures introduced by Gordon Brown to boost the housing market on Tuesday was howled down as "derisory".

Imagine the row if the 12-month stamp duty rise to £175 000 were not included.

Well, an impeccable Whitehall source says that until 10 days before the announcement, the stamp duty changes were not part of the announcement package, which was mostly about shifting money from years two and three of the three-year spending review to year one, in order to provide subsidies to build more homes for rent.

So sudden was the switch into stamp duty saving mode by Brown, that the Treasury has not even had time to calculate the cost of the measure. And, so they were forced to guess.

This has upset a mandarin so much, he has sprung a leak.

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