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Gloomy City boss turns to Dylan for inspiration
Hugo Duncan, City Correspondent19 Aug 2008
The head of one of Britain's biggest property firms gave one of the most bizarre statements ever to the stock market today to highlight the crisis crippling the industry.
Tim Wheeler, the chief executive of Brixton, used a picture of the four horsemen of the apocalypse on the front of a dismal half-year results presentation to reflect the mood in the property market.
He also resorted to quoting gloomy Bob Dylan lyrics as Brixton announced losses of £236.7 million for the first half, compared with a £192million profit in the same period last year.
Mr Wheeler, who is seen as highly successful but something of a maverick in the City, used the 1968 Dylan hit All Along The Watchtower to describe conditions, saying "the apocalyptic opening lines... seem to capture the beleaguered mindset of the UK commercial real estate market". The song starts: "There must be some way out of here/Said the joker to the thief/There's too much confusion/I can't get no relief.
"Businessmen they drink my wine/ Ploughmen dig my earth / None of them along the line / Know what any of it is worth."
Mr Wheeler said a fundamental problem with today's market was knowing what anything was worth because so little property is changing hands.
He said there was no way out of the impasse until sellers lower their prices and buyers return to the market.
The market is facing its biggest crisis since the early Nineties. Properties from houses and offices to industrial sheds are falling in value and developments have been put on hold because of funding problems and lack of demand.
The value of Brixton's properties, which include warehouses around Heathrow and at Park Royal, plunged 10 per cent between January and June. They are now worth 15.8 per cent less than a year ago.
Mr Wheeler said: "It's our job to tell it like it is. It's wrong for any business to just hope the economic problems will go away. " He added: "The issue now is how much further could property values fall. As we anticipated, the commercial property market has become more challenging in response to the credit crunch and slowing economies.
"There is confusion - and an element of denial - over property pricing due to lack of transactions. Ultimately, the real way out of here will be when the economy, the financial world and the markets stabilise. However, in the near term, distress should bring opportunities and we are well placed to look to capitalise on these."
The update did little to help Brixton's share price. The stock, which has lost about two-thirds of its value since January last year, fell six per cent today, down 141/4p to 2331/2p.
Analyst Alan Carter of Citigroup said: "Any statement that has a picture on its front cover of the four horsemen of the apocalypse and quotes extensively from Bob Dylan's All Along The Watchtower is unlikely to provide optimistic reading. Instead it's a story of reality."
