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2002 Appointed managing director GE Real Estate (UK) |
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2000 Appointed senior vice-president of business development, GE Real Estate, Stamford, Connecticut, US |
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1999 Appointed Six Sigma leader of Vendor Financial Services, Danbury, Connecticut, US |
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1996 Appointed general manager of Information Technology Group, Westborough, Massachusetts, US |
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1993 Joined Vendor Financial Services as European manager of business development, based in London |
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1991 Joined GE in corporate business development |
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1988 Receives masters of business administration from Northeastern University, US. Working as management consultant for Bain & Company, US |
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1985 Graduates with honours in mechanical engineering from Trinity College, Hartford, Connecticut, US |
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Burger lives in Walton-on-Thames and is married with two sons. Interests include travel, watching and playing tennis, and skiing |
Alec Burger was surprised when he opened a copy of the Sunday Times one morning last year to read that GE Capital was in the frame to buy Canary Wharf. The story appeared just over a year after Burger, a 42-year-old American, was appointed managing director of GE Capital Real Estate Europe, and it was certainly news to him.
Since then, Burger has become used to reading about his company being linked to big UK portfolio acquisitions. “I think people will naturally marry us to some of the bigger trades that are going on in the market, but I have absolutely no idea where the Canary Wharf story came from,” he says.
In April, GE Capital spent almost £500m buying both Haslemere and West End specialist Benchmark. Since the end of last year, the company’s property assets will have grown from under £1bn to an estimated £3bn by the end of this year.
This aggressive level of expansion has meant that the company is invariably linked to almost every big portfolio that is rumoured to be coming to the market.
In both the Haslemere and Benchmark deals, Burger has maintained close working relationships with ex-directors from both companies. He recognises that local expertise is a priceless commodity, particularly in the highly competitive West End market, where a little bit of knowledge goes a long way.
Management advice
After the Haslemere acquisition, he recruited Chris Bartram, the former chief of the company, to provide strategic property and financial management advice. He has entered into a similar arrangement with Nigel Kempner, the former chief executive of Benchmark.
“I think we have got a fairly strong history of doing deals where we can leverage the existing management, and obviously that was the story with MEPC (which GE Capital acquired in 2000). Haslemere and Benchmark have been very similar,” he says.
“I don’t think we will ever attempt to become experts in the West End when you have someone like Nigel Kempner, who has 20 years plus of experience in this market. It would be crazy for us not to use that knowledge.”
Now the company prefers to steer clear of highly competitive auction situations, which have been an increasingly common feature of the West End in recent years. Instead, it prefers to rely on its network of advisers and partners to sniff out what Burger describes as “value-added plays”.
Roundabout route
Burger arrived at the Mayfair offices of GE Capital Real Estate via a roundabout route. Having spent much of his childhood in the UK, he later settled in the US and trained as a mechanical engineer before deciding that his future lay in bricks and mortar rather than nuts and bolts.
He joined GE 14 years ago, and has worked in a variety of roles within the business. Before replacing Mark Collins as managing director of the UK real estate business in 2002, he was senior vice-president of business development with GE Capital Real Estate in the US.
Two years on, the easygoing Anglophile is clearly at home in the UK, and is as happy to talk about the changing fortunes of the English rugby team or the Olympic achievements of Amir Khan and Kelly Holmes as he is the West End property market.
Nonetheless, Burger has become fascinated by the West End as a market, which is perhaps understandable given that 60% of his company’s UK assets are located within a few square miles of his office. “There is a real uniqueness and cachet to West End investing. People want to buy buildings here to put in trust for their grandchildren. You just don’t see that in many other markets,” he says.
“If you look at almost any other market in the world, few of them from a cap rate perspective have been as stable as the West End. So that has been an obvious attraction for us, both from a performance perspective and in terms of diversification.”
There is not a lot that goes on within the W1 postcode that Burger and his team do not know about, and when a deal does slip through the net, he is not happy. “My worst nightmare is to open the paper and read about a big trade that I didn’t know about. That is not a good day.”
Outside the Benchmark acquisition, GE Capital has acquired two West End office freeholds since the beginning of the year. In July, it paid just over £9m for the former Estates Gazette building at 151 Wardour Street, W1, and in January, it acquired 52 Conduit Street, W1, for £8.6m from the Corporation of London.
In both deals, GE acquired the buildings with joint venture development partners – a key element of the company’s West End growth strategy, according to Burger. “When I took this job, I remember analysing what it would take to be successful in this market, and clearly GE needs a strong network of partners,” he says.
“We will never be able to go it alone, and I’d like to think that, under my stewardship, partnerships have thrived. This is a very small market in many respects, so you have to work hard to maintain integrity and credibility. If you have that, and if you are viewed as a good partner, then the sky’s the limit.”
Bullish on growth
The Benchmark acquisition has given GE a very strong weighting in the West End, and while Burger remains bullish on growth prospects for the market, it seems likely that the company’s focus could now move towards other sectors, such as hotels and even residential opportunities.
However, he insists that GE continues to be opportunity led rather than sector-specific in its investment approach. “It would probably make more sense, and we would sleep better, if we had some other diversification before we did another huge chunk of West End investing,” he says. “But there are no absolutes for us in terms of investing in retail or offices.
“The fun part of being part of GE is that the bar is always being raised. The commercial real estate market here is one of the biggest in the world, and I don’t believe we are anywhere near where we would like to be, or could be, in terms of our desire to invest capital into this market.”
