Our history
Early 1970's
The British Land we know today came into existence on 31 March 1970, when the existing British Land Company merged with Union Property Holdings (London) Limited. The combined undertaking had gross assets of £37.5 million and UPH’s John Ritblat – now Sir John – became its Managing Director. He at once set the Company on the innovative course that was to take it into the FTSE 100 as a major player in the corporate real estate field.
The seeds of British Land’s renaissance had been sown some years earlier, in 1958, when John Ritblat, along with another ambitious young businessman, Neville Conrad, set up the Conrad Ritblat agency. Energetic and skilful, from the start Conrad Ritblat prospered and expanded.
The decade and a half following the 1939– 45 War was a wonderful time to be entering the property market. Interest rates were low, demand for buildings was high and supply was inadequate in bomb-damaged London. The tight post-war regulation of the construction industry, meanwhile, prevented any risk of a development boom.
Conrad Ritblat acted for Sir Maxwell Joseph, a skilful businessman. He had many other interests and one of them was Union Property Holdings. Recognising that UPH was languishing through his inability to give it proper attention, he invited John Ritblat to use Union Property as his entrée into the wider commercial market. In addition to the Conrad Ritblat estate agency, John Ritblat had built up a small group of profitable private property companies, and in early 1969 a transaction was agreed for these interests to be acquired by UPH for a mixture of cash and shares. The arrival of John Ritblat gave UPH the force and direction that Maxwell Joseph could not spare from his other activities. The takeover was completed on 11 August 1969 and at this juncture Neville Conrad left the firm to run his own quoted public company.
The future Chairman of British Land had begun his own property career in 1952 with the well-known firm of Edward Erdman. In the more leisurely days of the 1950s communication was often by letter and these were generally delivered by hand. John Ritblat started out by delivering letters, but it wasn’t long before he was the one who would be meeting the recipients and doing deals.
In 1969 UPH was still a very small operation. David Cohen was Secretary and Financial Director and John Ritblat’s first appointment was Geoffrey Selwyn, who subsequently spent many years as British Land’s Head of Tax, later continuing as a consultant. In 1970 Jim Slater and Oliver Jessel sold a stake in British Land to John Ritblat and this, combined with help from common directors, enabled UPH to effect a reverse takeover of British Land in a three-for-five share exchange. In these early days, senior members of the small British Land staff were William Marsh, who went on to complete 50 years as Company Secretary and remained a consultant for a good few more years, and Alan Wilson, Group Accountant and later Treasurer.
The following year, 1971, John Ritblat became Chairman of British Land and Sir Maxwell Joseph retired from the Board. David Cohen, Financial Director of UPH, served as Finance Director of British Land from the time of the merger until his retirement in 1989. Also in that year John Ritblat recruited two new colleagues, Cyril Metliss and John Weston Smith, who were to serve the Company for many years. David Berry, another early colleague, started as a consultant then joined the permanent staff of British Land in 1971. He became a director in 1976 and retired in 1998. The non-executive directors were Stanley Berwin, who was Deputy Chairman of British Land until his death in 1988, and Pierre Lachelin, who had been a pre-merger director of British Land. He retired from the Board in 1972.
For the first few years after the merger the offices of British Land were at 53 and 54 Grosvenor Street, London W1, where the staff formed a closely knit and friendly team. In those early days, John Ritblat operated mainly from his office at Conrad Ritblat on the west side of Manchester Square, London W1. In 1973 British Land moved close by to 35 Portman Square, London W1 and John Ritblat moved there too.
Strategy for action
The company created by the British Land/UPH merger was still little more than a minnow, but very quickly began to swim in deeper ponds. At first, its main assets were blocks of residential flats which were sold off as quickly as possible in order to concentrate on commercial property. The strategic issue for property companies at this time was that the yield on good quality property was well below prevailing interest rates.
John Ritblat’s fledgling Company was starting out with enormous ambition but little substance from its small equity base of £13 million. It was clear that building up assets in the portfolio depended on a fresh approach in which opportunism was the key.
British Land’s use of finance had to be equally novel. Though more shares could have been issued, this route held little appeal, for the Company’s objective was to progress by creating wealth for its shareholders. As well as the importance of having cash available for Purchases, there is also the impact of debt on a property company. Aptitude in managing debt assumes almost as much significance as the choice of properties. The impacts of both skill sets are clear in British Land’s early activities under John Ritblat’s leadership.
Fresh initiatives
A search now began for countries where local finance was available at interest rates below property yields, and the Company quickly embarked on developments in Australia, Belgium and France, followed by Holland and Ireland. Unlike the situation in the British market, in these countries it was possible for property purchases to be self-financing from when they were acquired, and so a portfolio could be built up without a cash down payment.
British Land also embarked on its most significant acquisition to date – Plantation House in the City of London, a building of international renown because of its links with overseas trade. This 365,000 sq ft office building would have been quite beyond the reach of the old British Land. For years it had been home to the rubber, sugar and tea markets but by the 1970s insurance, commodities, shipping and banking had come to predominate, to be joined by The London Metal Exchange in 1980. Its wide corridors and equally impressive amenities made Plantation Place a regular “walk through” for many City workers.
Both in size and scope, and in the philosophy that underpinned its acquisition by British Land, Plantation House was the building that would set the pattern for the years that followed. The route to acquiring it was not a simple matter of a property conveyance and a payment, but was indicative of a new, adventurous approach to the corporate and financial aspects of the property business that would become British Land’s hallmark. It all began, quite innocuously, in 1971 when the Company acquired a 30% stake in, and then control of, a quoted company called Haleybridge Investment Trust. Haleybridge owned a number of diverse businesses and all of these were sold, which produced useful cash flows and also provided equally valuable hands-on management experience outside the property market. In addition to these rather fragmented elements, Haleybridge owned a strategic slice of Regis Property Holdings. Once control of this stake in Regis was secured, British Land was in a position to bid for the remaining Regis shares – a tense time, but the bid succeeded. For it was Regis that owned Plantation House, and it was by pursuing this rather circuitous path that British Land gained what was for many years its premier City of London office building. It was also excellent security for lenders, thus enabling the Company to raise money and stride ahead in building a property portfolio of quality.
1972 saw further major indications that British Land was emerging strongly from its years of relative obscurity. Having taken on board Plantation House the Company went on to buy the Croydon Centre office complex, and Broughton House, Sackville Street, London W1. Overseas, the Company’s Australian developments expanded to comprise over 500,000 sq ft of pre-lets. British Land was also active in Belgium, the Netherlands and France where, in addition to developments in Lille, Lyons and elsewhere, it purchased a 140,000 sq ft office building at 56 Rue du Faubourg St. Honoré, Paris, opposite the British Embassy.
Wider horizons
At the same time as it was expanding its overseas activities, the Company was pursuing a programme of opportunistic diversification outside the property sector as a way of increasing its income. It was unusual for a property company to venture into managing other businesses, one of which was film financing, the most notable being the Oscar-winning movie The Mission with Robert de Niro and Jeremy Irons.
A different initiative of long-term consequence was the formation of several joint venture partnership arrangements, each one tailored to suit particular opportunities. A key to British Land’s success has been its flexibility in adapting to others’ needs and aspirations, rather than seeking to make them conform to a set British Land pattern. In a joint venture they can enjoy British Land’s expertise in property management and property financing while British Land gets access to buildings that are not on the market, and earns fees for its services. In one such venture with Dorothy Perkins, the high street retailer with some 250 shops, British Land bought the 400,000 sq ft Derry & Toms store in Kensington High Street, London. Some while earlier Dorothy Perkins had added the glamorous fashion name of Biba to its activities. Biba had been hugely successful operating out of small shop premises in Kensington High Street and it relocated to the vast former Derry & Toms department store, but in the very difficult economic circumstances of the mid-1970s it had to close. Considered as a property transaction, however, the Derry & Toms acquisition turned out to be highly profitable.
This pattern of activity set the pace for 1973, when the entire Dorothy Perkins business was purchased. It continued to be run by its Managing Director David Roxburgh as an independent business unit with minimal interference from its new parent – another British Land characteristic. Meanwhile the programme of overseas expansion, still driven by higher yields on property abroad and by the affordability and availability of financing, continued on its course. In all, overseas holdings totalled 1 million sq ft in 1973, with a further 800,000 sq ft under development. All of this property was locally financed.
The United States venture came very close to being much larger. British Land had made a bid to buy the Uris Building Corporation, owner of a $700 million portfolio of properties, mainly consisting of offices in New York City. With fixed, low rate, non-recourse, amortising mortgages providing much of the finance, the cash flow from rents, assuming no increase, alone were enough to repay debt within 18 years. National Westminster Bank and Schroders had agreed between them to subscribe for 25% of British Land and 25% of Uris, so the $127 million net transaction was self financing.
It seemed a done deal but, the weekend before completion, younger Uris family members persuaded controlling family members to accept an offer 25 cents per share higher from National Kinney, part of Warner Communications. National Kinney was confident that British Land had checked the property assets thoroughly, but missed the real key to the deal which was the Company’s careful pre-financing. British Land’s completion of the deal had been delayed by the need to obtain shareholders’ consent to a 25% increase in the size of its own equity as part of this financing and during this delay it was gazumped.
The unfinanced National Kinney found that it had made an expensive mistake, as it could not afford to pay the higher interest rates which the world economic situation then demanded and which British Land’s stringent financing planning had anticipated. Disposing of Uris lost National Kinney and its parent, Steve Ross’s Warner Communications, something in the order of $25 million. Yet Uris remains “the one that got away” from British Land. The deal itself was prospectively very profitable, and indeed the Canadian developer Paul Reichmann stepped in four years later after some Uris buildings had been sold and did very well with the residue of the portfolio.
The company's history to 2006 was extracted from:
'No Stone Unturned. A History of The British Land Company 1856 - 2006' John Weston Smith (2006)
Plantation House, London EC3
Doors to the famous Biba HQ, and the one-time Derry & Toms department store. Designed by Walter Gilbert.
