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Shares in property whale British Land jumped on Monday when the market finally twigged it was close to selling a 50% stake in the giant Meadowhall shopping centre in Sheffield.
Wrong call: the shares that should have jumped first were those of London & Stamford Property. For the Aim-listed minnow run by veteran investors Raymond Mould and Patrick Vaughan is on the right end of this deal.
London & Stamford is set to pay around £550 million for a half stake in a centre valued at £1.4 billion in September and £1.7 billion the year before. British Land is a forced seller. It is being prodded by the City to reduce a £4.5 billion overdraft.
Mould and Vaughan have been watching and waiting for over a year for the right moment to re-enter the market.London & Stamford Property was listed on Aim in November 2007, raising £248 million. Since then a further £200 million has been pledged by an Abu Dhabi admirer.
The pair used £74 million this month to buy an office block in the City from Legal & General. Twice they have got the property cycle right. The question all are asking is: have they got it right for a third time?
A bit early to tell: but the serial entrepreneurs, who are now in their sixties, sold their first property venture, Arlington, to British Aerospace at the peak of the eighties boom in 1989 for £227 million, making £19 million.
In the 1991 economic trough Mould and Vaughan set up Pillar, selling just before the peak of the latest boom in 2005 to British Land for £770 million, personally making £34 million.
They like to spend it as well. They are bluff and canny characters who enjoy shooting, fishing and horse racing and the occasional good meal with a decent bottle of wine in Wiltons, the stratospherically priced restaurant in Jermyn Street.
Mould, 68, owns a string of horses and is chairman of Arena Leisure, the quoted horseracing group. Vaughan is seven years younger. He joined the board of British Land when Pillar was bought, but left after a year. During that time he presumably took a fancy to Meadowhall.
Former British Land chief executive Stephen Hester turned down an offer from US fund Blackstone for 100% of Meadowhall last May because it did not “match expectations”. Not a good idea in retrospect. But Hester is now off running Royal Bank of Scotland.
Today British Land is in the hands of another banker, Chris Grigg of Barclays, who took over in December. He will have the pleasure of presenting the results for the final quarter of 2008 next month.
They are bound to be horrendous. As Meadowhall was on the books in September at £1.4 billion and half the stake is now worth £550 million, then the whole is only worth £1.1 billion.
Here comes a £300 million writedown for British Land.
Meanwhile, Mould and Vaughan stand a fair chance now of being written up as the guys who called the bottom of the market, unless of course it turns out to be third time unlucky.
Secretive Pears family just keeps enjoying the fruits
The Pears family property business enjoyed a steady 12 months in the year to April 2008, according to the report and accounts for William Pears Family Holdings. The business owns thousands of rental properties and claims control over £6 billion of property assets.
Profits at the Hampstead-based group fell less than 10% to £36 million. The value of assets after debt rose £14 million to £443 million. There was almost £19 million in the bank, down £9 million on last year. The highest-paid director took £1.5 million, the same as last year. The company was even more generous than usual to charity. Donations rose from £4 million to over £5 million.
But since April, life has been far from steady for Mark Pears and his brothers Trevor and David. Since last summer, they have been in a bunfight with the Qataris to buy the Trillium property management empire from Land Securities.
There was a £1 billion-plus price tag on the business, which looks after thousands of Government buildings. But that number was whittled down and down as the economy went down and down. The spooked Qataris eventually pulled out, leaving the brothers triumphant and LandSecs downcast, for it had only managed to get
£750 million and was forced to write off £340 million on the deal.
Are the Pears celebrating? Not a clue. They are the near-invisible men. But they must surely be pleased. For the brothers already control 85% of a huge property management business called Telereal, which was founded on the old BT property empire. The two businesses will have combined revenues of £1 billion and manage more than 100 million sq ft of space. That should keep things steady in 2009.
A home from home for the squatters on Park Lane?
A small group of bedraggled squatters from 94 and 95 Park Lane were standing outside in the drizzle on Wednesday.
Their defiant chums inside were taking pictures of those who had come to take pictures of them being thrown out after an eviction order was granted that day by a judge.
Perhaps they really should consider a change of address.
For a far more sumptuous property, five doors up at 100 Park Lane, has lain empty ever since property company Hammerson moved its headquarters to Grosvenor Street in the summer of 2006.
The last great mansion on Park Lane was sold by Savills in December 2006 for £37.4 million to an unnamed Middle Eastern buyer.
In order to boost its value, Hammerson had plans approved to return the place to its Regency splendour, with 14 reception rooms and no fewer than 17 bedrooms.
Since then, the only occupants appear to have been security guards from Cosmo Security Systems. Perhaps it's time to double the guard.
