Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

Land Securities chief executive quits

Francis Salway leaves Britain’s biggest property developer after eight years at the helm, to be replaced by Robert Noel

After eight years at the helm of Britain’s biggest property developer, Francis Salway is bowing out as the chief executive of Land Securities.

Although lettings are slowing noticeably, the 54-year-old is leaving the business in good shape, City analysts said. Salway, who is leaving voluntarily and is not getting a payoff, will be handing over to Robert Noel, the head of the group’s London portfolio, at the end of March. Noel, 47, joined Land Securities from smaller rival Great Portland Estates two years ago.

Harm Meijer, property analyst at JP Morgan, said: “Whilst we knew this change was coming, it is sooner than we expected as we thought that Robert Noel would have to deliver on the development pipeline first. We always held Francis Salway in high regard, but believe Robert Noel is the right man to take over and we are looking forward to working with him.”

Salway – one of the industry’s more cerebral chief executives – said he never intended to stay at Land Securities for the rest of his career, and wanted a change: “One thing I won’t do is be the chief executive of another publicly listed property company.”

Land Securities reported progress in lettings at its shopping centres and office blocks and reduced the amount of empty space in its portfolio, although Salway admitted: “As is to be expected in a period of economic uncertainty, letting transactions are taking longer to execute.”

For example, it took the company 11 weeks to sign up CBRE Global Investors to One New Change, its shopping and office complex next to St Paul’s Cathedral in the City of London. Normally, deals take about five weeks to wrap up, said Noel.

He added: “Take-up [in the City] is running below the long-term trend. On the other hand, supply is well below the long-term trend. Deals are taking longer to sign up, however interest is higher than it was in the summer.”

He said there is a long list of firms looking to move, including insurers and mid-sized legal firms, some of which are in the process of merging. There are rumours that law firm CMS Cameron McKenna, which pulled out of a pre-let deal with Hammerson last week, is in merger talks.

Land Securities is building the “Walkie Talkie” in Fenchurch Street, which will be the first of the City’s new trophy towers when it comes on the market in 2014. The company plans to let it on a floor-by-floor basis closer to the time.

Britain’s biggest landlord has not been badly hit by the scores of retailers that have collapsed into administration, most recently La Senza and Peacocks. Salway said the majority of the nine La Senza and six Peacocks stores in its portfolio would continue to trade.

Analysis by construction research firm Glenigan shows that Land Securities has projects with a construction value of £316m that are expected to start on site this year, a marked improvement on the £85m started last year, although it is down on the levels seen in 2009 and 2010.

“The impact of weak consumer confidence and retail sales is evident in pattern of planned project starts,” said Glenigan’s economics director Allan Wilén. “The vast majority of the planned projects are office-led schemes, with retail accounting for only £18m of planned starts.”

Peel Hunt analyst Keith Crawford said: “No matter which way we look at it, Lands remains our top leader stock. Financial strength enables Lands to flex its West End weighted development programme to between £1bn and £4bn. Combined with a portfolio studded with ‘trophy assets’ and development opportunities, we believe Lands to be in a very flexible position.” The shares have risen 9% this year. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds