Poor David Atkins – do you not think the newish chief executive of Hammerson deserves a rise?
This question will peeve the 99% of Estates Gazette readers not earning jackpot pay, but it will have occurred to 99% of those looking green-eyed at one table in last week’s magazine (26 June, p53). Yes, the one listing the gross pay of those running the UK’s biggest property companies.
Total remuneration for British Land’s Chris Grigg was £1.78m; for LandSec’s Francis Salway, £1.32m; for Ian Coull of SEGRO, £1.06m.
Compare these goliath awards to the £622,000 paid to young David, a 43-year-old former DTZ surveyor, given the job of running Hammerson last October by chairman John Nelson, after his removal of John Richards.
The figures are not current. On 1 April, Atkins’ basic pay jumped from £350,000 to £500,000, putting him closer to all but Grigg, whose basic is £800,000.
The big variations come in bonuses. Here, Atkins faces an uphill task to earn anything like the £655,000 paid to Salway, or even the £433,000 earned by Coull.
Why? Hammerson has always been parsimonious. In the boom years of 2006 and 2007, Richards’ bonus was no more than £300,000 and his total never reached £800,000.
Stephen Hester at BL earned a total of £1.7m in 2006-07 and Salway £1.2m at LandSec. Note: the chief executives of these two – now smaller and less profitable – businesses earn about the same today.
Hammerson is only two-thirds the size of BL and just a little more than half the size of LandSec, measured by stock market value. On the same measure, Atkins is running a business bigger than SEGRO. Hammerson’s CEO is relatively poorly rewarded if you look at equity value. This may help explain why headhunters looking to replace Richards found no external candidate.
Not that it seems to have mattered. Atkins has not dropped any bricks over the past nine months and has concluded some astute deals, including the buyout this week of Brookfield at Cricklewood, the sale of Exchange Tower in Docklands and the purchase of Leadenhall Court in the City.
In fact, he has done better than his peer group, says leading City property analyst Alan Carter of Evolution Securities. He says: “Under David Atkins, no company has changed its philosophy – in terms of moving towards more liquid assets and portfolio repositioning – more than Hammerson.”
Give that man a bigger bonus.
TfL’s shrewd move
Last week, Transport for London said that it had surrendered its 30-year lease on 190,000 sq ft at The Shard, at £38.50 per sq ft, for an “undisclosed sum”.
Well, let’s disclose right away that the payment to TfL was between £10m and £15m.
This is a good deal for TfL’s property chief, Anthony Bickmore, who can easily find another 190,000 sq ft at a similar price. He will no doubt find himself subject to the considerable charms of Adrian Wyatt of Quintain. The long-haired bon viveur has already accommodated 1,900 TfL staff on the Greenwich Peninsula – and he has land aplenty to accommodate more.
This is also a good deal for the Qataris who own 80% of the 1,000ft tower now rising fast at London Bridge – and for Irvine Sellar, who owns the rest. If the jv can now get £58.50 per sq ft for the 590,000 sq ft of office space, instead of £38.50, it will increase the value of The Shard by maybe £200m.
Maybe – agents have yet to be appointed, despite many pitches. The Qataris think it a bit early to be selling hard.
This has not stopped inquiries for the 65,000 sq ft of residential space, which is to be turned into 12-15 flats each of 4,000-5,000 sq ft and with 360-degree views. When told that prices are likely to be around £4,000 per sq ft – or £16m-£20m per flat – not all potential buyers are dissuaded.
A little list is being compiled.
Former EG editor Peter Bill contributes to estatesgazette.com/blogs
