When PRUPIM spent £105.4m on a private rented housing portfolio from Berkeley Group in April, it was the first UK institutional purchase of a substantial lump of residential property for decades.
Until then, UK institutions had bought offices, retail and logistics. But homes? Until the Berkeley deal, the answer had long been no.
So it was an appropriately groundbreaking investment to mark the departure of the outgoing chairman and former managing director of PRUPIM, Martin Moore.
Moore has been with the Prudential since September 1974, joining after his A-levels to train as a surveyor while working for the estate department of the Prudential Assurance Company Limited.
The last day of June should mark the end of 39 years with the Pru in increasingly prestigious positions, but Moore already sounds as if he is planning beyond this summer, which is typical of a man who has been part of the organisation’s lifeblood since he joined.
He is already speculating that new PRUPIM chief executive Alex Jeffrey “may ask me back for a few days from time to time”. And even without that Moore would have plenty on his plate as he already serves on the boards of F&C Property Trust and English Heritage.
This is not a man anticipating putting his feet up.
So retirement is not really the word for what Moore is planning. He is still very much working and even though he jokes about “tending the vegetable patch” he only does it in the context of saying that gardening is not what he wants to do. Anyway, he adds later, he doesn’t even have a vegetable patch.
Reading research
This is also a man who, when he talks about having more time to read after he leaves PRUPIM, elaborates by explaining that he wants to read property research, “not Dickens, although I suppose I might read that as well”.
And even after “18 or 19 years” at the top, Moore still retains the enthusiasm to talk excitedly about how the Prudential has grown since he joined.
“When I was first here we looked after £1bn or £2bn worth of property, almost all in the UK. Now it’s £17bn, worldwide. The scale and reach of the business has been transformed,” he says, proudly.
Nor is it just about money. The Berkeley deal is just one of many big transactions done under his watch but when asked what he thinks of as his greatest achievement, it is not a deal at all. It’s people.
“The best investment I ever made – the reason I have managed to survive as long as I have – is that I have been able to build and sustain and motivate people around me. I’ve done some great deals but none of them has given me as much delight as to see a team grow and develop and mature. It’s all about the people.”
This might sound like spin, but if it is Moore is a very good faker of sincerity. That said, there is one sense in which the people at the Pru have changed since 1974: there are far fewer of them.
Moore himself draws attention to this pointing out that if the growth of assets under management is one of the big changes since he started all those years ago, the shrinkage in the workforce is another.
“There is an inverse relationship between the two,” he says.
Of course this reflects wider economic and social changes, but one of the main reasons is that in the mid-1970s the Prudential did almost everything in-house. It had its own engineers, architects and lawyers, for instance. Now all that has been outsourced.
“The business has changed beyond recognition,” says Moore.
Even job titles are different.
When Moore was executive head of PRUPIM he was styled “managing director”, but his successor Alex Jeffrey has taken the more 21st century title of chief executive.
“The roles are no different, it’s just more modern parlance. I suppose I kept the title because that is what I was called when I took the job,” says Moore.
If it seems inevitable that Moore should have stayed with the Pru all this time, it isn’t. He admits that he has considered leaving “a number of times” but that often when he said this to his bosses they “put other opportunities in my path”. It sounds as if Moore has always been valued.
The time he nearly departed, he says, is five or six years into his time with the firm, in his mid-20s and a fully qualified surveyor, when he was bitten by the travel bug.
He says: “It was in the early ’80s and the Pru were thinking of America, so my boss suggested I become part of the team that were covering it. We were based in London but I spent a lot of that time abroad.” In other words, it kept Moore at the Pru but satisfied his urge to see a bit more of the world.
His bosses then must have reflected that they done a good thing as he went up the corporate ladder to lead the company into the next century. And now one of the things he leaves it with in 2013, is the new found intention to invest in the private rented sector.
The Berkeley Group deal is unlikely to be the last for the company. Moore and colleagues more directly involved with the residential deals say that this purchase “was not a tactical thing, but is for the longer term and is the culmination of a lot work and research”.
PRUPIM started looking at the private rented sector two years ago. Moore says that the decision to invest was based on a wide range of factors, including rental growth and the increasing tendency for the British to rent rather than buy on grounds of affordability. It means that PRUPIM is likely to spend even more on the sector soon.
“I would be extremely surprised if in 12 months’ time our residential portfolio wasn’t larger than it is now. We are at a tipping point which makes this sector very appealing to investors like us,” he says.
It has reached the point where Moore says that residential is already regarded by PRUPIM as its “fourth estate” to add to commercial, retail and logistics.
Expanding in Europe
In addition, PRUPIM is expanding in Europe, hiring staff in Frankfurt and opening a new office in Paris, where it launched a year ago, at 5 rue Royale.
So Moore is leaving PRUPIM at a time of change, a time of expansion, and at a time when it is moving into a new area for UK institutional investment. Is it also the cusp of a broader property recovery? Moore is too canny and long-in-the-tooth to say yes to that.
He says: “To say that would be too binary, there are always shades of grey. I think there are encouraging signs in some areas and the residential market is one of those.”
So Moore can retire to his two homes – he lives in both London and East Anglia and describes himself as “residentially schizophrenic” – with cautious optimism. And as he goes it seems appropriate that the PRUPIM name goes too, as the new moniker M&G Real Estate – announced earlier this year – comes into effect at the end of June.
