Should we all be a little more like the Sage of Mayfair?

EDITOR’S COMMENT If I didn’t really like Andrew Jones, having got to know him over the past 20 years from his days at Pillar Property, British Land and all the way to chief executive of LondonMetric – now the UK’s third-largest listed REIT – I’d probably roll my eyes every time he updated the market. Here we go, I’d think. Jonesy is going to tell us how well the business is doing. How he’s called it right and how so many of us haven’t. I don’t roll my eyes. But I do think “here we go”. However, that thought is followed with a smile because I know there’s going to be dose of realism doled out. And, yes, that update probably will come with a “look at how this is paying off for us and how our convictions have been solid”, but why not? They have. Why not be proud of that? And why not share what you’ve learnt with others? That’s a gift, isn’t it? And perhaps it’s something we don’t do enough of in real estate. Now, you’ll all know I love the so-called “softer side” of real estate. People, planet and purpose are big themes for me. They are big levers I believe the property industry can – and should – pull to showcase itself in a different light to the wider populace. But if you know me, you’ll also know I love simplicity and straightforwardness. I like the truth, no matter now brutal it is. And that is why I like Andrew Jones and look forward to trawling through his chief executive’s statement and getting his view on the world. He doesn’t mince his words. He remains bearish on elements of the market where others see glimmers of hope and are perhaps fooled by the romantic notion of recovery or a return to how it was before. And he is bullish on markets where sense and sensibility reign. At LondonMetric, he has stuck steadfastly to a strategy to invest in “structurally supported sectors” that benefit from “consumer tailwinds of online shopping, convenience retail, social experiences, healthcare and quicker gratification” and to avoid “troubled legacy sectors” where income security and growth is less certain. The shiny side of real estate isn’t for Jonesy. He doesn’t get attached to assets and isn’t particularly fussed about growing AUM. He just wants to create a business that is focused on and delivers the three Cs – collect rent, compound your income and then watch the yields compress. Nothing more and certainly nothing less. Jones tells us that the business has vowed to be “ruthlessly efficient” in how it operates and allocates capital in its “quest towards dividend aristocracy” and making sure it becomes synonymous with the eighth wonder of the world. That wonder, to Jones anyway, is income compounding, his “secret sauce and the rocket fuel that creates wealth”. LondonMetric’s acquisition strategy going forward will focus on four areas, he tells us: fund wind-ups, where Jones says it is “plugging into a portfolio”; debt refinancing opportunities outside its chosen sectors, such as offices; taking advantage of redemptions; and sale-and-leasebacks. More M&A, following its deals with LXi and CT Property Trust, could also be on the cards, he says. I really wouldn’t blame anyone out there in the real estate sector if they do roll their eyes every time Andrew Jones steps up to deliver his sermon on the performance of the firm and the market – and, of course, some of his trademark Buffettisms. It can smart sometimes. But he, like his muse Warren Buffett, does offer up some sage advice. And my two clear favourites from this year’s final results? “When you choose real estate where the wind is at your back, you are more likely to be a price setter than a price taker,” and “There is no substitute for being aware and always prepared to pivot.” Now you can roll your eyes.