Our history

1992 to 2002

Late in 1992 the Board embarked on a carefully targeted drive to seek a major joint venture with a partner who would be prepared to invest in the Company. A briefing document was prepared that would explain the Company’s strategy and demonstrate to potential investors how the Company had evolved since 1970 and how it was preparing for the future.

John Ritblat ensured that the illustrious investor George Soros had sight of the document early in 1993. This persuaded him that involvement in the real estate sector, and with British Land, would be beneficial for his Quantum Fund, which had a record of highly profitable investment over many years. Quantum Fund executives agreed to make available up to £250 million for investment through The British Land Quantum Property Partnership (BLQ), and in addition subscribed for 11.3 million British Land shares, being 4.8% of the existing share capital. Having Soros and the Quantum Fund on board, represented a massive step forward for British Land.

The effects of this venture were electric. British Land’s share price, which had stood at 179p at the end of 1992, had risen to 436p by the end of 1993. British Land Quantum had brought tremendous firepower to the acquisition process, and the flow of transactions offered was enormous. Properties bought at this time included the Eastgate Shopping Centre in Basildon, Essex, and several Tesco superstores as well as 122 Leadenhall Street in London EC3. The partnership also bought 51 Eastcheap, an office building adjoining Plantation House. The alliance lasted for less than two
years before, late in 1994, an opportunity arose to buy out the Quantum interests in the partnership. It had been envisaged from the start that British Land would eventually become the ultimate owner but there was surprise that the option should be exercised while the British Land Quantum Partnership was still relatively young.

In the 1994 Report and Accounts the Chairman’s statement recorded that over £1.6 billion had been spent on purchases in a concerted bid to provide a modern and diversified portfolio. Out of a total portfolio that now stood at just over £2.2 billion, 72% had been acquired in the previous five years – the best bargains often become available in the years of recession, when others are forced to sell. With values falling and little in the way of competition from buyers, British Land could enjoy a period of intense activity buying good quality, well located buildings at very attractive prices. By the end of the financial year ending 31 March 1995, the Company was able to report that its portfolio had risen 54% in the year in value, following the most active year the Company had yet seen.

Broadgate and beyond

Other significant moves in 1993 and 1994 related to the Company’s growing interest in elements of the Broadgate Estate in London EC2. In 1993, the Company had increased the existing partnership to 100% of 1, 2 & 3 Finsbury Avenue. The next year it was able to arrange for BLQ to acquire a 29.9% stake in Stanhope Properties, which in turn owned 50% of Broadgate Properties. There followed the purchase of control of Stanhope Properties and therefore the assumption of its bank debt which was overdue for repayment. This intricate and extensive transaction brought British Land control of Stanhope’s 50% shareholding in Broadgate Properties, which was the owner of some 2 million sq ft of prime office buildings at Broadgate and Ludgate within the City of London.

The prospect for EC2 was soon to become more enticing still since, within a matter of months, British Land was able to buy the remaining half of Broadgate Properties. When it was done, the Group portfolio had risen to £4.4 billion. The interval between the Stanhope purchase and the buy-out of Broadgate Properties was almost a year, a nerve-wracking period as there were other prospective buyers in the wings showing a keen interest.

As part of the Broadgate acquisition the Company had also secured control of Broadgate Estates Limited. This subsidiary company had been formed in 1986 to provide building and estate management for Broadgate itself. Under the energetic leadership of its Managing Director, Barry Winfield, it expanded its remit to provide services to a wide range of external clients, in the City of London and elsewhere. Like much of British Land’s activity, buying Broadgate had been a long planned strategy that had evolved over a decade and more. The Company had first become directly interested in the Broadgate site in 1982, however, it took until 15 January 1996 for the whole of Broadgate Properties to be acquired. Perhaps the most remarkable aspect of the Broadgate story was the way the Company anticipated and responded to changes in both interest rates and tenant demand. Out of the 2 million sq ft acquired by 1996, the Broadgate element was fully let and only 61,000 sq ft was still available to rent at Ludgate.

More joint ventures

It was not all offices, however. In a new departure, British Land entered into a £200 million joint venture with Scottish & Newcastle in 1996 in order to buy 306 pubs let to The Chef and Brewer Group. As the year progressed, the Company moved still further down the joint venture route. Late in 1996 it added a £175 million joint venture with Tesco to which both parties contributed retail portfolios. Then early in 1997 it formed BL Universal, a £960 million joint venture with Great Universal Stores.

And then there was the Custom House Docks Development in Dublin. By 1998 the eleven-year programme was in its final stage. The Company had developed and sold over 1 million sq ft of office and retail space, 333 apartments, a 235 room hotel and parking for 2,000 cars on this 27 acre site that had been transformed from dereliction.

The dot.com years

To pay for the Company’s expanding range of activities, new sources of finance were now needed. A major development in the debt market was the introduction of securitisations, which provided debt related to specific cash flows from assets but without the rigidity of the long-term debenture market. The Broadgate Estate was ideal for this purpose, with high quality tenants in prime, well located real estate in the City of London, and in 1999 British Land raised £1.54 billion in its Broadgate securitisation. This was by far the largest financing it had ever done and exceeded anything else that the market had seen.

In late 1998 the Company obtained 100 Liverpool Street and 155 & 175 Bishopsgate, which added to its securitisation pool at an opportune time. This was a time when the fundamental attractions of property briefly went out of fashion, so far as stock market investors were concerned. Bedazzled by the dot.com bubble, they allowed themselves to believe that the old rules no longer applied: all one had to do was to pile into the new technologies and enormous rewards would be forthcoming. For a while stock prices rose rapidly, but in the end the old economics reasserted themselves.

Surprisingly quickly the dot.com bubble ended. British Land was affected by the euphoria in its early stages, when the share price rose above 800p in March 1998. This was clearly unsustainable and by February 2000 the British Land share price had declined to 327p.

A major event in this period was the Company’s acquisition in 1999 of the Meadowhall Shopping Centre near Sheffield. This 1.3 million sq ft development, with over 200 retail stores on a 125-acre site, serves a catchment area of 7.5 million people within a 60 minute drive time. Since British Land acquired Meadowhall, rental income had risen from £45 million per annum to £81 million by 2006.

With Meadowhall clearly promising good things, the following months saw a concerted attempt to extend the Company’s retail base through a strategic move with another property company, Liberty International, which was the owner of several leading regional and super-regional centres. British Land reached a conditional agreement with Standard Bank of South Africa which would have made British Land a 29.9% shareholder in Liberty.

The deal involved some complicated technical issues but, unfortunately, the Bank itself then became the subject of a bid, and it became necessary for it to hold an Extraordinary General Meeting to obtain shareholder approval for the disposal of its Liberty stake. Regrettably, this could not be obtained. The potential target’s board was not enthused at the prospect of a 29.9% holding in British Land’s hands and some investors expressed concern at the rapid pace of growth pursued by British Land at a time when the stock market emphasis was resolutely fixated on dot.coms.

The thrust into retail properties was pursued further, with the purchase of 22 Homebase stores. The Company also bought London & Henley, which owned apartments primarily in Central London, in continuation of a policy of residential property development and investment which could be activated whenever good opportunities arose.

Changes at the top

There were changes on the Board both in the late 1990s and in the early years of the 21st century. Bob Bowden, Head of Property Investment and Acquisition, became an executive director in 1997. In 1998 Shen Adam, Managing Director of Broadgate Properties, joined the Board but remaining only until 2001 when, sadly, he died. David Berry, who had joined British Land in 1970 and the Board in 1976, retired in 1998. Stephen Kalman, who began at British Land in 1972, had primary responsibility for its development activity and served on the Board from 1989 to 1999 when he retired. Cyril Metliss, who joined the Company in January 1971 and became a director in July of that year, retired from the Board in 2003. In 2002 John Weston Smith became Chief Operating Officer and was succeeded as Finance Director by Graham Roberts, formerly a partner at Arthur Andersen.

There were changes in the non-executive directorate too. Michael Cassidy, who had served as chairman of the powerful Policy Committee of the Corporation of London, joined the Board in 1996 and John Spink retired in 1997. John Reynolds, Chairman of Corporate Finance for Europe at ABN Amro Bank, joined the Board in 1997. Unhappily he died at the early age of 50, only two years later. In 1999 Robert Swannell, then Vice-Chairman of Schroder Salomon Smith Barney, became a non executive director. Peter Simon retired in 2000, having been a non-executive director since 1988. Derek (now Sir Derek) Higgs, then an executive director of Prudential among other appointments, and Lord Burns, Permanent Secretary of H.M. Treasury 1991 – 1998 and a director then of Pearson and Legal & General Group, both joined the Board in 2000. Lord Burns left the Board in September 2005. Sir Derek Higgs, who by then had achieved distinction through his eponymous report on corporate governance, left in July 2006. The senior executive at British Land was considerably expanded in the 1990s as the Group itself grew.

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)

The eastern edge of Broadgate, looking over Exchange Square

The eastern edge of Broadgate, looking across Exchange Square