Former Landsec chief executive Rob Noel’s appointment as Hammerson’s new chairman has raised eyebrows across the industry and sparked speculation regarding the retail landlord’s motives.
Hammerson’s share price dipped by around 3% to roughly 107p in the hours after it emerged that Noel will replace David Tyler in the role.
Industry leaders have connected Noel’s appointment to Hammerson’s aspirations to diversify its retail-heavy portfolio towards mixed-use locations, which involves elements of office development.
Such a move might herald a meaningful return to offices for Hammerson, which sold the remainder of its offices portfolio in 2012 to Canada’s Brookfield Asset Management for £518m.
As one senior executive at a landlord points out, Noel has “never been a retail fan”.
“I almost fell off my chair when I heard the news, because [Noel] really doesn’t like retail,” says another well-placed executive, quipping that it “must really be the bottom of the market” for the subsector if Noel is “jumping out of offices” to return to it.
While the appointment has been met with surprise, industry insiders have observed that few people would have been as well-placed as Noel to replace Tyler in the job.
One seasoned retail property professional remarks that “you don’t have to be a specialist to be a chairman, but you need to know how to get things done, and how to hold someone to account for it”.
“There’s a danger for a lot of businesses at the moment that are bringing people with no experience into the sector, or real estate, and face a huge learning curve in approaching the basics,” he notes.
“Hammerson needed someone with public company experience as well as experience with retail, because there will be a bucketload of stakeholder engagement. There aren’t that many people who fit this criteria. [Noel] might not have liked retail, but there is a lot of logic to it.”
While the role will undoubtedly carry a lot of liability, it promises at least to entail a tidy pay package – Tyler made £346,000 in fees in 2019.
During Noel’s tenure at Landsec he oversaw major projects including developments in Leeds and Oxford city centres, its schemes in the City and its transformation of Victoria, SW1.
The mixed-use Nova scheme in Victoria, in particular, has been one of Noel’s biggest undertakings – the location, built speculatively in 2013, hosts commercial, residential and retail space across 5.5 acres.
An analyst note from Exane BNP Paribas stated that as a “well-known and respected leader” in real estate, Noel’s experience in particular will be “very much welcomed” by Hammerson’s shareholders, as the future of large-scale shopping centres evolves.
In terms of Noel’s approach, he has been credited with being direct, tough and willing to put a “boot up the rear” of staff to drive results.
“He’s smart and good at tackling challenges,” notes a former colleague.
Hammerson, which has had a tumultuous year, has pinned its hopes on a mixed-use strategy in recent years.
Its woes have been amplified by the coronavirus outbreak, which has resulted in heavy losses in rent collection.
Additionally, the landlord’s deal to sell a portfolio of retail parks for £400m, the proceeds for which were touted to help Hammerson “create a more concentrated portfolio of flagship venues, premium outlets and City Quarters”, collapsed last month.
Any decisions that Noel will make as a non-executive will need to mesh with the views of the landlord’s incoming chief executive. It is likely that the recruitment process for David Atkins’s successor will not be fully underway until Noel joins the board, which will be no later than 1 October.
All eyes will be on Noel’s transition from a full-time chief executive to a non-executive role, in helping to shape the landlord’s strategic direction – whether it will end up involving a cash call worth hundreds of millions, or otherwise.
While it might take some getting used to, Noel’s non-executive tenure at housebuilder Taylor Wimpey, which he took up last year, will have given him some experience in this arena.
Notably, it seems Noel will be working closely with Des de Beer, a representative of South Africa’s Lighthouse Capital, who has also been appointed to a non-executive position at Hammerson.
Lighthouse Capital has been building a stake in the landlord in recent times, with its shareholding currently standing at 15.1%.
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