The Land Securities story
It all began in 1944 when Harold Samuel, Land Securities' founder and chairman, bought Land Securities Investment Trust Limited, which at the time owned three houses in Kensington together with some government stock.
The prudent purchase of London property and acquisition of companies combined with the post war development activity meant that in a relatively short time, Land Securities established itself as the UK's leading property company. A position it still holds today.
On 15 February 1944, Harold Samuel bought Land Securities Investment Trust Limited. Having made a number of corporate and commercial property acquisitions in 1946, a decision was made the following year – 1947 – for the company to concentrate on commercial property in and around the West End and the disposal of residential holdings began. In 1949 the Company was reputed to have paid £1m to acquire Devonshire House, W1.
The 12 March 1948 issue of ‘Investor's Chronicle' said: “Meteoric seems the only fitting term to describe the growth in earning power of The Land Securities Investment Trust. For the year March 31 1938, earnings on the Ordinary stock were equal to 3%. Ten years later they are running at an annual rate of 83%.”
On 27 August 1950, the ‘Evening Standard' reported that the shares had jumped by 15 shillings to £6.15 shillings. “If they reach £8 Harold Samuel will become the first post war millionaire… shares bought in 1944 for £100 are now worth £6,000.”
The 1950s saw the company continue to buy key London assets with purchases of the Adelphi theatre, WC2; Clive House, Petty France, SW1 (the Passport Office); 470-504 Oxford Street, W1 (Portman House); and Bowater House, Knightsbridge, SW1 among some of the more well known assets.
In 1955 Ravenseft Properties, one of the most active development companies, already 50% owned, became a wholly owned subsidiary. Previously known as Ravensfield Investment Trust, it was a pioneer of the post-war regeneration of Britain's shopping centres, rebuilding blitzed cities such as Hull, Exeter, Plymouth, Bristol and Coventry and carrying out many developments in close association with the New Towns (Harlow, East Kilbride, Basildon etc). In 1958 Ravenseft Properties completed 17 developments including Crewe, Barnsley and Solihull.
The 1960s were a decade of continued growth and an active development programme both in London (major works in Victoria Street, SW1 included Westminster City Hall, Esso House, Kingsgate House) and in the Ravenseft portfolio (in 1960 115 shops and six stores were completed, with 93 shops still under construction). In the 1961 Annual Report, the Chairman, Harold Samuel, stated that the Company ‘has more developments in hand than at any time in its history.' Two years later, in June 1963, Harold Samuel became the first person within the property profession to be knighted for public and charitable services.
In 1964, the company decided to venture into industrial assets by purchasing a 19 acre factory site at Welwyn Garden City. Additional sites in Manchester, Swansea, Bradford, Hastings, Basingstoke, Bedford, Welling and Glasgow were also added in the 1960s, to this growing area of the business.
The early 1970s saw more continued development with work starting on St James' Square, Edinburgh and the opening of the first phase of the St John's Shopping Centre at Liverpool. A number of acquisitions also took place among them The Westminster Trust which saw key West End holdings like New Scotland Yard, SW1 added to the growing portfolio.
In 1974 the property crisis, brought about by various factors including the rent freeze, restrictions on borrowing money in the UK, the tax on unrealised gains etc, led the company to sell some £200m worth of properties over the next few years to meet commitments of a much reduced development programme. Apart from committed developments, only refurbishment work was planned.
Land Securities (Management) Ltd was formed in 1978 to act as the Group operating company under the direction of Peter Hunt, who was appointed Chairman and Managing Director. The following year, Peter Hunt was appointed the Managing Director of Land Securities Investment Trust Limited and took over the day-to-day running of the Group.
In 1980 the Group undertook a £100m Rights Issue of 41 million Ordinary Shares at 263p a share, which was the "largest Rights Issue in years", according to a Business Week article (23 June 1980).
The developments started to gather pace following the strategic reduction in the 1970s. Architectural competitions for both Grand Buildings, WC2 and Stag Place, SW1 (now Cardinal Place) were launched with work beginning at Grand Buildings in 1988 after a third planning application (the competition's winning entry) was passed. Developed shopping centres in Ealing, East Kilbride, Livingston and Liverpool were opened with the latter – St John's Liverpool – being given a major award from the British Council of Shopping Centres.
In 1987, Lord Samuel of Wych Cross, Chairman and founder of the Group died. The 1988 Annual Report following his death paid tribute to ‘the architect of the greatness of Land Securities.' Peter Hunt was appointed Chairman to succeed him.
The early part of this decade saw another dip in the property cycle which resulted in Land Securities' portfolio value falling four years in a row before increasing to £5bn in 1994. It was also during this period that the company took the decision to rebalance its portfolio with greater weighting by value towards retail property. By the end of the decade the majority of the Group's acquisitions had focused on retail and industrial assets – adding around 5 million sq ft of space into the portfolio. Included in these purchases were The Bridges, Sunderland; St David's, Cardiff and Bon Accord, Aberdeen.
In the mid 1990s, the company made a return to central London office development with almost 500,000 sq ft either started, or planned to start of which 50% were pre-let – Eland House, SW1; Regis House, EC4; 110 Cannon Street, EC4 among them.
In 1997, Peter Hunt, having announced his intention to retire as Managing Director and continue as Chairman with effect 1 July 1998, died unexpectedly following an operation on 8 December. The Board appointed Ian Henderson as Managing Director having already been identified as Peter's successor and John Hull as the caretaker non-executive Chairman. In 1998 Peter Birch was appointed non-executive Chairman, having joined the Board the previous year.
In 1999 it was announced that the Group would be expanding its Group-wide development activities to create value in a low inflation environment. In the last three years of the decade the Group had effected £600m of property disposals reflecting the process of the investment portfolio rationalisation and reducing the number of properties in the portfolio by nearly 20%.
The Group started the new millennium by purchasing Trillium and entered into a new property outsourcing market. At the close of the decade this business was sold to Telereal - the property investment and services company - for a total headline consideration of £750 million.
The start of the decade saw the sales programme accelerate and the Group continue its strategic shift from asset accumulation to investing in higher return activities and a new focus on the customer. Whilst the company continued to sell it also had a very active acquisition programme both at a corporate level – Tops Estate, LxB, SMIF – and at the asset level – The Galleria, Hatfield; Arundel Great Court, WC2. This was also a decade to deliver award-winning developments – Cardinal Place, SW1; New Street Square, EC4; Whitefriars, Canterbury; Princesshay, Exeter; Cabot Circus, Bristol among the highlights.
In 2004, it was announced that Ian Henderson would step down as Chief Executive and be succeeded by Francis Salway who joined the Group in 2001. Under the new leadership the company undertook an internal restructuring programme which culminated in the focusing of the business on three sectors where it had market-leading positions, namely, retail, London offices and property outsourcing. As a result the industrial space that the company owned was disposed over a number of years. A highly successful £3.2bn debt restructuring was also implemented that year, which resulted in an improved AA credit rating, a decrease in future cost of debt and the provision of a long-term, flexible funding structure for the business.
Peter Birch stepped down as non-executive Chairman of the Group at the end of 2006, and was succeeded by Paul Myners on 1 January 2007.
In 2007 the Board conducted a business review following its conversion to REIT status on 1 January of that year. It was concluded that over the long-term the Group's component businesses, and shareholders, would benefit from separation, and proposed to demerge the Group into three specialist separately quoted entities. However, the following year at its 2008 Half Yearly results the Group announced that whilst it still believed in the virtues of property specialism ‘given current adverse market conditions, it would not be in shareholders' interests to proceed with [the demerger] implementation and our work on demerger has therefore stopped'.
This same economic and financial environment resulted in an unprecedented downward repricing of commercial property assets in the UK. Despite selling approximately £4bn of assets, including the disposal of Trillium, since April 2007 and the repositioning of the development programme, the pace of decline exceeded the pace at which assets could be sold to counteract the impact of falling values on the Group's balance sheet position. This represented an ongoing risk to the Company's ability to operate flexibly in the market, and its ability to take advantage of any opportunities that might arise as a result of the market conditions. In response, the Company carried out a £755.7m Rights Issue in February 2009.
In October 2008, Paul Myners stood down as Director and Chairman of the Company to take up a position as the Under Secretary of State and Minister for the City in the Treasury with immediate effect. The Board announced in November of the same year that Alison Carnwath would become the new Non-executive Chairman, having sat on the Group's Board since 2004.
Following the downturn, the Group was the first to restart development. In London, the Group embarked on a major development programme including offices at 20 Fenchurch Street in the City, and 62 Buckingham Gate, 123 Victoria Street and a residential development at Wellington House, in Victoria. The Group also made an early start on construction in retail, pushing the button on a major retail-led development in the heart of Leeds, Trinity Leeds. This could be the only shopping centre to complete in the UK in 2013. New shopping centres were also added to the portfolio with the purchase of the O2 Centre, NW3, the Westgate Centre (50% share), Oxford, and Overgate, Dundee.
The start of the decade also saw the completion and opening of One New Change, EC4 - a unique office and leisure destination in the City. Designed by architect Jean Nouvel, the iconic building offers stunning views of St Paul's Cathedral and an unrivalled mix of retailers, restaurants and cafes.
In 2012, it was announced that Francis Salway would step down as Chief Executive and be succeeded by Robert Noel who joined the Board in January 2010 as Managing Director, London Portfolio.