In typically candid style, Nick Leslau talks to Damian Wild about his plans for St Katharine Docks, his fears for the UK’s high streets and the morals of supermarkets
With a tale involving a German tourist, a one hundred euro note and a Kefalonian hotelier, Nick Leslau managed to silence an audience of the great and the good this week.
What had seemingly started out as a shaggy dog story – it also took in two caterers and a lady of the night – turned into a much more insightful commentary on the circular nature of our economy, one where confidence is all.
And it was its very simplicity and conviction – not its initial apparent absurdity – that hushed the 350 guests at this week’s annual Heron lunch, where Leslau was the star turn.
It was a performance that said a lot about Leslau. It was, by turns, humorous, disarming, insightful, confident and self-effacing. And it was lapped up.
Dinosaur
Lapped up because, despite his 52 years and greying hair, Leslau still carries something of the enfant terrible about him. Gerald Ronson, who asked him to speak at the lunch, said to him beforehand: “I’m a dinosaur. They don’t want to hear me. They want to hear youngsters like you.”
“That made me feel pretty good,” says Leslau. “But you know, I don’t really care. Age doesn’t really matter. It’s about spirit and what’s in your mind and innovation – all those things. I’d like to think that we still practise lots of different dynamism in the office and try and do things differently.”
In doing so, Leslau’s Max Property Group, founded with Mike Brown in the downturn, continues to plough a “classic opportunistic non-specialist” furrow.
“We’ve never gone for more than three or four months without buying something,” says Leslau. “But at the moment, it’s difficult. We spend a lot of time looking at real estate wondering why it’s not cheap – probably understanding why it’s not cheap – and other people are out there paying more for it than we think it’s worth. So it’s frustrating at the moment.
“We’ll just go where the opportunity is and we don’t know where they’re coming from. I think if you’d asked me how much stock the banks would be offloading two years ago, I would have said the banks would be selling a lot more stock. They seem to be selling a lot more loans, but they’re not selling direct stock.
Crystallising losses
“This is primarily because they can’t afford to or they are locked in to long-term swap arrangements, which means that they can’t without crystallising those losses.
“So I don’t see anything changing there. We’ll see whether the big American hedgies make money out of buying the debt that they’ve been buying, which I have my reservations about. But we’ll wait, we will wait and see.”
In the meantime, Max is not sitting on its hands. Last summer, it paid £156m for St Katharine Docks, next to Tower Bridge and the Tower of London. It comprises 500,000 sq ft of offices, restaurants and shops, together with central London’s only marina. It is a site that excites Leslau. “I’m actually very proud of what we’re trying to do at the moment at St Katharine because it’s a fantastic scheme,” he says.
“It’s been neglected terribly for 20 years. We’ve paid £330 a square foot for the estate, while the block on the corner of Tower Bridge Road, which is actually part of the estate, was sold off at nearly £900 a square foot. The ability for us to actually make money and create something really special for London is important.
“We want to put on events there – classic boat shows and mid-sized yacht shows. We’ll have events going on on the water so that every time you go there you’ll see something different. The thing with St Katharine is that people go ‘oh yes, I went down there 20 years ago. It was beautiful.’ But they’ve had no reason to go back. So we’re carrying out major refurbishment of some of the office space, which will be stunning and bring in new restaurants and independents, just raising what is already a beautiful environment, and that’s exciting.”
Not everything excites Leslau. Indeed, many things frustrate him. Planning, regulation and the future of retail – even the price of booze – are all on his mind these days. But perhaps unlike the government, whose approach to policy making can seem to be reactive and incohesive, Leslau sees clear links between them.
“Supermarkets are there because people use them,” he says, rising to a theme he has spoken on a number of times recently.
Poised to fall
In a nutshell, Leslau fears for the high street. And he begins to thread together an argument that treats urban blight, alcoholism, bullying retailers and submissive planners as a line of dominos, poised to fall.
“Ultimately, the consumer is voting with his feet and going to the big boxes and the supermarkets. Some would say: ‘Who can blame supermarkets if they’ll find any profitable category on the high street and compete with it because they have the floor space?’ I’m not actually blaming the supermarkets, nor am I blaming the shoppers who go there.
“But I do think local planning authorities are bullied much too easily into giving consents for additions and extensions to these supermarkets because they’re scared of losing the employment.
“People go to supermarkets because they get better value than they can on the high street – that’s a fact of life.
“But if we want to preserve our high streets, albeit on a contracted basis, we have to do more to make town centres more usable, more accessible and more attractive, and the peripherals will change back to residential.
“But it ain’t going to happen if we keep granting consents for more supermarket space, where they’re not going to be selling baked beans and pork chops. They’re going to be selling every single category they can that is profitable elsewhere. I worry for the town centre at a social level, I really do.
“With at least one-in-four shops either empty or non-rent-producing, and 20m sq ft of open A1 consented supermarket space out there, and considering the impact of the internet, I see anything else outside the top 50 or 60 centres as vulnerable, so [retail] is where I think we’re unlikely to go.”
Indefensible
But supermarkets are not blameless, either: “I do think there is a moral position where it is indefensible that supermarkets sell booze, for example, at below cost. How can that be sensible if as a society we allow that to happen?
“We will create a bunch of Detroits around the UK, where there are boxes around the city and the city centre becomes a no-go area, unless we are very careful.”
As the Heron lunch highlighted, Leslau is much admired for the sense he talks around property issues. Perhaps politicians should heed his warnings, too.
Nick Leslau was speaking at a recent Estates Gazette/Profile Network Face to Face event. To book for the next event, an interview with Almacantar’s Mike Hussey on 18 April, go to www.profile-network.com
Teamwork gives business a sporting chance
Leslau is a sports fan prepared to put his money where his mouth is. So much so that he is co-owner of Saracens rugby club. And while there are business people who draw parallels between corporate and sporting life, Leslau’s are a little more insightful and a lot more first-hand. “I’m loving the fact that the Saracens are finally English champions, after 14 years of investment and blood, sweat and tears.
It is so wonderful to be part of a group that has now found itself. It’s the same as in business. To get a group around you that is so cohesive and works so well and where everyone cares about everyone brings an enormous amount of satisfaction. I cannot tell you how much satisfaction. And who is going to win the league? Obviously, Saracens. At least, I would like to think we are. But we’ve got a long way to go, you know, it’s a long, long nasty old season.”
