Land Securities – What Makes It Tick?

Jane Ambrose finds that Gerald Jennings, the company’s Regional Director for the North of England, has just a few words to say on the matter.

Gerald Jennings is straight up. What you see is what you get. He treats everyone in his team with equal courtesy (and for all I know equal disapprobation when necessary). How shall I put this? He’s really just a decent, honest-to-goodness, nice guy. He first of all takes me on a tour of the offices and I notice that he’s greeted wherever he goes. That’s a good sign. He then asks me if I want tea or coffee – or perhaps some water. Another good sign. Most interviewees just don’t do that. All in all a pretty impressive start.

Gerald Jennings comes to the real buying and selling end, the management of the property business by a circuitous route. He qualified as a chartered surveyor then joined Arcadia (formerly known as the Burton Group) in Leeds, where his role was Estates Controller, responsible for the company’s national property portfolio. That’s when he realized that his future was really in the management of property rather than ‘surveying’ it. And what an impact he’s made.

He joined Land Securities in 1999 to head the new Leeds office. He is Regional Director and has a team of eight with a further 80 based at property assets throughout the North of England. He says that teamwork is the most important thing – with that in position everything else just falls into place. His responsibilities are primarily those of asset management, property management and new business. But there’s more to this man than at first meets the eye. What makes him tick? Property or the mix of retail and property – it’s simple. Because it’s a combination of retail – which is very dynamic, relatively short-term and tactical in its thinking – and property where you have to think long-term and be strategic.

“We build something which is going to last,” says Jennings who continues: “ So it’s that mix of shorter-term/longer-term balance, trying to make sure that it all fits and works for us – that’s the role I play.”

First the bigger picture. When Francis Salway became the new Chief Executive at Land Securities, they carried out a corporate restructure – they looked at how they were going to carry on their business. They became very focused. It was evident that they needed to centre their activity on retail (both in town and out of town), on offices (but predominantly, almost exclusively in fact, within the London area), on the Trillium business (which is the property outsourcing element of the company), and finally the urban community development venture (with massive urban regeneration schemes).

In terms of the Leeds office, Gerald Jennings and his team exclusively manage the retail assets in the north of the country – by that is meant north of Birmingham to the Scottish Border where David Smith takes over in Glasgow for the company’s Scottish portfolio. They manage those assets yes – but they are also there to look at new opportunities. To see how the business can grow.

Jennings says: “We’re talking here about asset management. How we can grow that asset through active management – adding value to the business. And that will involve development activity.”

For example, at the White Rose shopping centre in Leeds, the Sainsbury’s store will shortly be reconfigured with an entirely new in-store design and Jennings continues: “That’s a very good example of how we in this office try to grow our business in the region – by entering those transactions, releasing space, bringing new retailers into the scheme. And hopefully the customer is happy too because we are bringing new retailers into the city.”

What they have done in Leeds, which was totally new for the company as a whole, was to ‘co-locate’ with the Trillium arm of the business.

“What we agreed about Leeds was that the work we were doing there – and in the North East generally – and the amount of work that Trillium was doing meant that we needed a bigger presence in this part of the world,” comments Jennings.

He continues: “So we have one regional office which is our public face, if you like, to the world and our stakeholders in the north but it also gives us the opportunity to see just where the synergy is between the two businesses. So we are now actively doing things together. Seeing where we can jointly add value.”

Because of the value of their portfolio in that part of the country Leeds was seen as the most practical place to do business. Predominantly most of their assets are based in the North East – from Newcastle down.

They own and manage the shopping centres although some of the shopping centres are not owned on a freehold basis and increasingly the company has gone down the partnership route.

“For example,” he says, “we don’t exclusively own White Rose and are in partnership with the Evans Group, a Leeds-based private property company. In York we’re in partnership with the local authority. The same is true in Sunderland – we’re in partnership with the local authority. But in Newcastle, where we own The Gate we own it on a freehold basis. But where we are in partnership with a local authority and it’s leasehold the lease is so long-term that effectively we are owner/managers.”

In the Trillium business, for example, when we agree a contract with the Government or with the BBC they transfer their property interest to Land Securities Trillium and we then take on the whole responsibility for managing that property and providing a full outsourcing service – down to the provision of pencils.

“We don’t act as managers for other companies,” says Jennings, “we manage our own properties. And in that respect we’re a little bit different from other property companies which perhaps own the buildings but employ external consultants to manage them. What that means is that there is an interface between the customer who is the retailer or the office occupier – there’s that third party. We don’t have that. We have a direct relationship with the customer.”

There have been discussions about that over the years. Is that the right way forward? They have always come to the conclusion that yes it is.

“Because we want that customer to telephone us rather than a third party only for them to then call us. You’re just extending the chain and removing yourself from direct contact. We differentiate ourselves from other property companies in that respect. Which means that my ‘phone rings that much more of course!”

What is happening at Land Securities Retail division right now? At the time of going to press Land Securities has announced a proposal to acquire Tops Estates PLC a specialist investor in town and city centre shopping centres. If successful, this acquisition will see three new shopping centres enter the northern portfolio in Leeds, Harrogate and Liverpool.

“In general terms it’s just an extension of what we have been doing,” says Jennings. He continues: “The way Francis, as the new Chief Executive, has said that strategically this company should go. If you think about our Trillium business we’ve just completed a new contract with the DVLA. At the backend of last year we completed a transfer/property swap with Slough Estates in which we swapped our industrial properties for their retail assets. But it’s really more of the same – looking to acquire more properties, invest more money. We are now in a situation, which a number of other property companies are to be fair, where the desire is to grow the business through strategic acquisition.”

As for his proudest achievement in this property business that’s a difficult question. There have been so many. From a personal point of view and also probably a business one the way that the Leeds office has succeeded has to be up there.

“There was understandable caution,” he says, “as some people wondered if this transfer of responsibility from HQ out to a regional base was the way of the future or not. But actually it’s worked – and it’s worked very well. So I think I would say that the way the Leeds office has evolved and developed has been successful.”

And what of Gerald Jennings’ most important role in this company?

“Well if I could use a bit of a cliché it’s definitely adding value. I know people will hate that phrase but it’s very true. What do I mean? Well it’s the short-term/long-term thing again – marrying those two. It’s all about adding value. First, and probably foremost, for our shareholders – but we don’t do that unless all of our other stakeholders (our joint venture partners, local authorities, occupiers and consumers) are similarly served.”

He continues: “We think within Land Securities that we definitely add value in the long-term. Anyone can do short-term deals and make a quick buck. We’re not about that. And it’s about thinking about the customer at the end of the day. That may sound like another cliché but if we don’t think about the customer we’ve lost the plot.”