Published this week is the EG Rich List 2008 supplement, listing the 500 wealthiest people in UK property. Here, Lucy Barnard highlights some of the investors whose fortunes have taken big hits from the global financial turmoil, and on p47, those whose holdings are still riding high
What a difference a year makes. In the space of just 12 months the total value of the UK’s richest 500 property investors has fallen by £14.7bn – slightly more than the cost of nationalising Bradford & Bingley – as property values have slumped.
The richest men and women in property saw their combined wealth fall by 12%, with the average fortune now standing at £205m – down £25m from last year’s £230m.
This year’s EG Rich List, which scrutinises the fortunes of those worth £30m or more, thanks – to a significant extent – to their property holdings, shows that the falls have not been across the board some are still doing very nicely – see overleaf.
But for others, the falls have been eye-watering. Robert Tchenguiz, who last year shared a £1bn fortune with his brother Vincent, does not even appear in this year’s list after he lost £1bn because of the collapse of Kaupthing (see right). A similar tale can be told for Jim Moore and Brad Rosser, the founders of property seminar company Inside Track, which appointed administrators in May.
Other well-known property players are suffering too. Housebuilders Keith Miller and David Wilson have both lost around two-thirds of their fortunes. Serviced office supremo Mark Dixon is down by two-fifths.
Moreover, with the credit crunch showing no sign of abating, and many of the valuations relying on Companies House accounts which are often filed many months in arrears, it seems likely that much of the fallout for investors is yet to be revealed and will only come to light in next year’s listing.
Big names who are big losers
Benzion Freshwater
Was £1,100m Now £780m (29% fall)
Benzion Freshwater has seen the share price of his listed Daejan Holdings fall sharply over the past year from around 90p in November 2007 to less than 50p this week, slashing the value of his 79% stake. In July, the company announced that profits were down 76% on 2007, to £47m, and said that it expected to make no significant property sales in the first quarter of 2009.
Robert & Vincent Tchenguiz
Was £1,000m Now Unknown
Last week, Robert Tchenguiz saw nearly £1bn wiped off his fortune in just 24 hours. In consecutive days, Tchenguiz sold his 10% stake in Sainsbury’s at a loss of £600m. He then lost another £400m after being forced to sell down his entire 25.7% stake in Mitchells & Butlers on Tuesday night. He was forced into the sales as his financial backer, Icelandic bank Kaupthing Singer & Friedlander, tried to repatriate cash by selling assets and calling in loans. Brother Vincent has also seen his fortune shrink over the past year but announced earlier this month he was refocusing his Consensus Business Group to take advantage of the turmoil.
Jack Petchey
Was £950m Now £800m (16% fall)
Having sold a 28% stake in Rugby Estates to serial investor Laxey last month, making a loss of 25%, 83-year-old Jack Petchey seems down on his luck. His other major UK property investments include substantial stakes in Workspace, which reported a £45m pretax loss in August, and Warner Estates, which has also suffered badly from the crunch, seeing its share price fall from 522p in November to around 50p this week.
Keith Miller
Was £810m Now £280m (65% fall)
Miller Group, the UK’s largest privately owned housebuilding, property and construction group, became embroiled in a feud to rival even Dallas or Dynasty after a breakaway group led by the chief executive’s cousin, James Miller, said it wanted to sell its 64% stake in February. So acrimonious was the split that it necessitated the setting up of a “family council” to help resolve issues. This seemed to have worked in April, when Bank of Scotland took a minority stake in the company, prompting chief executive Keith Miller (right) to announce that the company had drawn a line under its feud. However, after the bank’s semi-nationalisation this week, and with the housebuilding industry on its knees, the future looks tough for Miller, which has lost a third of its value over the past year.
David Wilson
Was £729m. Now £245m (66% fall)
Leicestershire housebuilder David Wilson was taken over by rival Barratt at the top of the market in May 2007 in a £2.2bn deal. That was when Barratt’s shares hovered around the 1,000p mark. Unfortunately for the David Wilson family trust, it received more than half of the payment for its 22% stake in shares – which have nosedived to around 86p this week, leaving Barratt’s market cap at only £301m and depleting the family’s fortunes by two-fifths.
Mark Dixon
Was £600m
Now £350m (41% fall)
Dixon, the founder of serviced office provider Regus, has seen his wealth fall by £250m over the past year. Earlier this month, the high court approved a scheme to restructure the Regus Group. The company will be incorporated in Jersey but will have a head office in Luxembourg, after Regus announced in August that it was moving its head office out of the UK for tax reasons.
Laurence Kirschel
Was £460m Now £350m (24% fall)
West End landlord Laurence Kirschel has seen the value of his central London portfolio eroded by the credit crunch. To make matters worse, it emerged in April that he is also suing his former accountant John Hoare for £125,317 in damages for failing to complete Kirschel’s tax returns on time.
Anton Bilton
Was £150m Now £120m (20% fall)
Anton Bilton’s Raven Mount announced a pretax loss of £14.5m in September this year as the company’s costs trebled. The worsening financial crisis has prompted the company to de-merge from its AIM-quoted Raven Russia spin-off and to sell its care home subsidiary, Audley, this week to Moorfield Group for £15m. The move leaves Raven Mount with some remaining residential schemes and a second homes joint venture in the Cotswolds.
Tom Bloxham
Was £73m Now £50m (32% fall)
Bloxham’s trendy urban development company has been hit hard by the dramatic falls in value of city-centre new-build flats. Last month, the company entered into a period of consultation with an undisclosed number of its 280 staff, which is expected to result in job cuts. Bloxham and his family have a 72% stake in the Manchester-based company.
Jim Moore
Was £40m Now unlisted
Jim Moore set up property club Inside Track Seminars in 2001 to teach buy-to-let investors the secrets of property investment. In 2005-6 profits soared to £12.2m on £70m of sales for the company and its sister firm, Instant Access Properties. In that year, around 40,000 people attended its free seminars and the company was talking seriously about a £150m float. But in May this year, Inside Track appointed administrators, a month after the company announced it was suspending its seminars because of the buy-to-let property crash. Profits for the nine months to the end of January slumped to just £239,000, compared with £12m for the 2005 full-year. In 2007, Moore was criticised by the high court for running up £1.5m in legal fees in the course of divorcing his wife of 15 years.
Brad Rosser
Was £40m Now unlisted
Jim Moore’s co-owner of Inside Track has suffered similar misfortune, seeing Inside Track go into administration this year.
Harry Handelsman
Was £40m Now unlisted
Known for introducing the concept of loft living to Londoners, Canadian Harry Handelsman built flats in central London and the City fringe in the 1990s and 2000s. His most ambitious project is the £150m redevelopment of the 245-bedroom hotel and 67 apartments at St Pancras station. This left Handelsman worth £40m in 2007. However, profits have not proved to be as much as Handelsman originally hoped. He recently resolved a legal dispute with fellow developer John Hitchcox, who runs luxury residential brand Yoo, who had demanded half of the profits on the scheme. Handelsman responded that “harsh economic realities” meant that the team could make a loss of as much as £11m on the scheme.
how THE REALLY RICH have stayed rich
Despite the vast falls in wealth experienced by many on the EG Rich List, some of the über-rich seem unaffected by the credit crunch.
The combined riches of 2008’s 10 wealthiest investors stand at £25.1bn, only 2.7% lower than last year’s total. Moreover, of those 10, four saw no decline whatsoever.
These included the Duke of Westminster, who at £7bn tops this year’s list for the sixth year running and whose super-prime London estate and vast acres of farmland have made up for any falls in the rest of his portfolio. Ian and Richard Livingstone, the brothers who own London & Regional, also saw their £1.8bn fortune emerge unscathed.
On the other hand, the second richest entrants, the Reuben brothers, saw £190m wiped away over the past year, partly owing to their investments in retirement specialist McCarthy & Stone. But with a total net worth of £3.3bn, that only equates to a 5% loss for the brothers. Indeed, the top four remain unchanged from last year and seven of this year’s top 10 were in the 2007 top 10.
Mark Pears
Was £1,500m Now £1,500m (no change)
The Pears family property empire has been growing steadily since 1952. This week it emerged that it could get even bigger with the news that the family-owned Telereal is engaged in exclusive negotiations to buy Trillium, the outsourcing arm of Land Securities. In March, the family announced a 30% fall in profits to £38.2m, but at the same time it said its property assets had more than doubled in value to £234m.
Prince Charles
Was 608m Now £667m (up 9%)
Prince Charles’ latest property venture is likely to be a £1bn sustainable development fund to build sustainable mixed-use schemes. Credit Suisse has been appointed to raise cash for the fund, called Tellesma, and a team of big hitters, including former Land Securities chairman Ian Henderson, will run it. The move is the latest extension to the prince’s property plans which have most famously culminated in the development of Poundbury, a 400-acre village in Dorset built on Duchy of Cornwall land. The prince hopes to capitalise on the Poundbury experience with his new fund, a third of which will be owned by his charities.
Harry Hyams
Was £320m Now £322m (up 0.5%)
The man who famously developed Centre Point in London’s West End – and then even more famously kept it empty allegedly to avoid capital gains tax, has so far sailed relatively unscathed through the credit crunch, with a small increase in the value of his vast fortune. Hyams must also be pleased that after being the victim of Britain’s worst ever robbery two years ago, the gang responsible for taking £80m of artwork were jailed in August for a total of 49 years.
Anthony Lyons
Was £287m Now £355m (up 19%)
When Anthony Lyons and David Coffer sold a 50% stake in Earls Court & Olympia last July to Capital & Counties, the deal valued the entire company at £380m. They had paid £247m back in 2004. Lyons has retained a 30% stake in EC&O, which has been earmarked by C&C for 15m-20m sq ft of development.
Elliott Bernerd
Was £277m Now £276m (0.4% fall)
Last month, sovereign wealth fund the Qatari Investment Authority announced it had taken a 20% stake in Chelsfield Partners, the property company set up by veteran investors Elliott Bernerd and Sir Stuart Lipton. The QIA said this stake would form a strategic alliance that would maximise Chelsfield’s value. Last year, Bernerd and Lipton were outbid in their attempt to buy the Earls Court exhibition centre, but with the firepower of a sovereign wealth fund, they are expected to be looking for opportunities brought about by current market conditions.
Nick Leslau
Was £200m Now £200m (no change)
In February, serial investor Nick Leslau bought a £220m office portfolio from Invista at £15m below the asking price. He then made it known that he was sitting on £500m of cash, which could be geared up to generate £2bn of purchasing power. Leslau must be feeling pretty smug right now as in 2007 he had avoided office acquisitions in favour of hotels and garden centres. Nonetheless, the tycoon, who was recently a Channel 4 Secret Millionaire, must be concerned that the debt for some of his more recent deals has come from collapsed Icelandic bank Kaupthing, and that Halifax Bank of Scotland is one of his major backers. Back in 2006, Leslau, now struggling Icelandic investor Baugur and HBOS each invested in an opportunity fund.
