by Carl Mortished
Wimpey is getting out of property investment. The construction giant believes that owning buildings ties up too much capital. “It’s not appropriate for a group of our size,” says chairman Sir Clifford Chetwood.
The portfolio took a hit in the annual revaluation at December 31, down 14% to £320m. Property profits were up at £18.1m (£12.7m), but the group made provisions of £19.8m, chiefly closure costs for the US property development activities. A £31.9m exceptional item provides for falling land values in the UK and USA.
The retreat from investment means putting properties on the block. Wimpey is selling 50% of Little Britain, the 427,000-sq ft office development on London Wall, EC1; City rumours say Nippon Life is the buyer. Also for sale are Vantage West, overlooking the M4 at Chiswick, and Bishopsgate Court, formerly 4-12 Norton Folgate, E1, acquired for £15m in 1989 and redeveloped by Wimpey.
Wimpey is not leaving commercial property altogether. The company will continue to develop, and the capital now sunk into buildings will be redeployed in construction and trading.
With the focus now on dealing, Wimpey has taken Tony Leyland, formerly managing director of trader Ford Sellar Morris, on board.
