Nick Leslau, BSc(hons)Est Man, FRICS - Chairman and Chief Executive of Prestbury

Posted on 13 November 2019

Susan Freeman

Hi, I’m Susan Freeman, welcome back to our Propertyshe Podcast series, brought to you by Mishcon de Reya in association with the London Real Estate Forum, where I get to interview some of the key influencers in the amazing world of real estate and the built environment. 

Today, I am absolutely delighted to welcome Nick Leslau.  Nick has had a long and very successful real estate career.  It all started back in 1982 when aged just 25 he became chief executive of Burford Holdings which he ran for 13 years creating a billion pound net worth company and delivering an incredible 1,300% net asset value for shared growth over a 10 year period as a quoted company.  Since 1998 Nick has been chairman and chief executive of the Prestbury Group which invests in and manages over 3 billion pounds worth of property assets.  He sat on the Board of Max Property Group Plc which he founded in 2009 and 5 years later the company was sold to Blackstone for 650 million pounds.  He and his management team floated Secure Income REIT PLC in 2014, currently with gross assets of 2.4 billion pounds including Thorpe Park, Alton Towers, 21 private hospitals and 135 budget hotels.  All assets are let on very long-term inflation protected leases.  Nick has been a director of many quote and unquoted companies, professional bodies and charity and educational Boards and is a director of Saracen’s Rugby Club.  So now we are going to hear from Nick Leslau on how he became the youngest ever CEO of a listed company at the tender age of 25 and has gone on to be one of the most successful real estate entrepreneurs of the last few decades.   So Nick welcome to the studio.

Nick Leslau

Thank you very much.

Susan Freeman

So I just did a very quick calculation and I reckon that you have been in real estate for almost 38 years?

Nick Leslau

God is it that long.

Susan Freeman

Yes.

Nick Leslau

Actually it doesn’t feel that long which is a good thing.

Susan Freeman

You started very young, I think you were the youngest CEO of a listed company at Burford, you must have been in your early 20’s?

Nick Leslau

25 yep.  I actually still think, it’s pretty nuts, but I still think that is the youngest ever CEO of a public company in this country.  God knows what I was doing at the time, I didn’t have a clue.

Susan Freeman

Well you couldn’t have had very much experience to go on.  You must have made it up as you went along?

Nick Leslau

It was the 80’s, it was… we were very fortunate because we hit the ball market, I had qualified as a chartered surveyor, I didn’t want to be a chartered surveyor, I wanted to be a services consumer and not provider and I joined a very small property company called Burford Estate and Property Company which Sam Rosen had started with a £200,000 loan and within sort of 3 years we had listed that at 8 million and that’s when I became initially the joint CEO and then we sold it 18 months later for nearly 50 million to Nigel Wray who has been my partner ever since 30 odd years.

Susan Freeman

Well it was a pretty good start and had you always been entrepreneurial because there must have been something that got you started on that?

Nick Leslau

You know at the time you don’t think you are, it’s only you know, looking back, reflecting – which I don’t do very, very much – because I am too busy dealing with what’s going on in the future but I guess so because at school I do recall I was trading Parker pens and sort of taking from one kid and offering to pay them you a few days later.  It was all about credit in those days and selling the pen and then you know, so I was doing that sort of thing and then I left school and went to Warwick to study French and German, well actually mainly German which was a huge mistake and I left that but then the monumental thing that changed my life was that I went to work as a shelf filler to save up in a little supermarket in Belsize Park and I wanted to save up some money to go travelling with a friend and the owner, who’s a friend to this day, sort of took a shining to me, he kind of mentored me and within 9 months I was running a staff of 36 people, aged 19 and so I must have had something there.  I don’t know what it was but there was definitely something that stirred the juices and then I went off to do a Degree in estate management but I also did lots of things in between. I had market stalls in Oxpens Market in Oxford, Caterton Market, Wembley Market, round the corner in Berwick Street and selling umbrellas and I literally I would do anything to try and kind of make some cash and that’s how I funded, well that and actually there were lots of businesses that I was doing at the time.  Most of them failed miserably but I had one great business which was arranging for models for videos, not models, extras and it was at the time when only sort of the Elton John’s and Michael Jackson’s could afford to have videos, promo video’s when they launched and then MTV came along and this whole new – and technology changed – and this whole new genre of video making with any single that was released and so I, through a friend of mine, I was the casting director.  So I got paid £150 and all my kind of good looking student friends got £50 a day to appear in these videos and that’s how I funded my education.

Susan Freeman

Well I think real estate was very lucky that you decided to go in that direction rather than in your sort of film media?

Nick Leslau

I also wonder whether that was by default or not.  Did I, it’s an interesting question I ask myself, what would I have done if I hadn’t done real estate but anyhow it is entirely academic because I did real estate and it has been incredibly good to me.

Susan Freeman

And how did you meet Nigel Wray because I think you both went to Mill Hill didn’t you but not at the same time?

 

Nick Leslau

No Nigel’s 12 years older than me but we had sort of played rugby at the same time in different teams at the Old 6.02 and what essentially happened was when we had started Burford and Burford was growing we were approached by Nigel who had floated a shell company called Chart Search and basically was looking for a third to reverse into us. Or for us to reverse into him and so I sort of met him a few times, we got on really, really well and we did the deal.  Sam left and I stayed on and then we built from a 50 million pound business into a billion pound company.  That period was 10 years and then I decided to sort of, I got a little bit despondent with running the, you know, big company and I wanted to do it again so I left with Sandy Gunn and then we started Prestbury and started to do it again.

Susan Freeman

So Burford went very well.  I do remember the Saga World.

Nick Leslau

Yes.

Susan Freeman

Largely because I was sitting next to you at some charity dinner and you had just done the deal and it just sounded so amazing because it was going to be the first indoor virtual reality.

Nick Leslau

Virtual reality.  No it was a disaster and the property deal wasn’t a disaster but we bought the Trocadero out of receivership and there was all this empty space above and we are now talking about I think the early to mid-90’s.  Anyway we were introduced to Saga which at the time with Nintendo were the largest electronic games companies in the world and they flew me out to Tokyo and I went there a few times, anyhow you know they came up with this thing which was going to be the first indoor virtual reality theme park and so we did a joint venture deal and when it was announced the press went nuts, I mean it made the domestic news, the international news, it was extraordinary and the anticipation was incredible but they went into lockdown so I wasn’t even seeing what they were building there. Anyhow the opening night came, it closed down Piccadilly Circus, we had I don’t know, a 1,000 VIP’s you know, the A-listers and I remember the Spice Girls and Robbie Williams and all sort of you know, famous people and sportsmen and their kids and I had this horrible – it still gives me, it still makes the hairs stand up on my arms – but so it had opened and this thing was magnificent, I mean it really did look incredible and I look at a ride and I saw a big queue, one of the many rides that were in there, I saw a big queue starting to build up and I looked at it and then I turned round to the operations director of Saga and I said ‘what is the capacity of this ride?’ and he clearly didn’t know and so he asked someone else. Anyhow it was a pretty simple question I had asked.  Eventually it came back to me that it was 18 people and I’d worked out that getting on and off the ride took about 9 minutes, and therefore they could probably have the capacity for 100 people an hour and in the queue there were somewhere between 200 and 250 people.  So that meant two and a half hours wait for a single ride and this was being played out over every ride and the blood just drained from my face and of course I knew what the headlines were going to be in the press the next day and the analyst reports and it was very embarrassing.  It was really, really embarrassing because I should have asked or known but I assumed that Saga knew what they were doing.

Susan Freeman

Well you would think so, would you?

Nick Leslau

Yeah but I don’t blame, I blame myself you know, I don’t play the blame game.  It was my, you know, I take responsibility.  But the property still did okay you know, in spite of the failure of Saga World.  But, and I wonder if I learnt anything in that.  I am not sure.  I went for what I thought was a good operator but it shows that nothing is easy.

Susan Freeman

And I suppose if you try something new there is always the possibility that you know, if you stick to you know, same old boring thing you are relatively safe?

Nick Leslau

Yeah.

Susan Freeman

I mean that could have been amazing.  I mean it is incredible how amongst all the amazingly successful deals that you do that the things that stick in people’s minds sometimes are the things that are not expected so I remember the Knutsford 4.

Nick Leslau

Yeah, yep another one, another one.  You are really picking them today.  Could you have not chosen Enid Blyton and Noddy or something?

Susan Freeman

Well we can go on to Enid Blyton.

Nick Leslau

Oh okay.  But no the Knutsford 4, actually the Knutsford 4 was an extraordinary phenomenon and it was looking back on it, I mean it was such a short period of time, this whole thing sort of took place over 6 or 8 weeks and yet it’s… when my name is mentioned so is Knutsford.  But I don’t mind at all actually because it was a really, it was the end of the dot.com era, I had been introduced to Archie Norman who is now chairman of M&S and I think Lazard’s through my friend Julian Richer, Richer Sounds and Nigel, myself and Julian decided to put 5 million pounds into a shell company because Archie had just sold Asda to Walmart and he wasn’t doing anything and we thought ‘we’ll put it into a shell, there will be some puff in the share price’ because you know, we expected it to go to three times, four times, as normally happens.  It doesn’t happen so much these days because the rules about shell companies have changed but within 6 weeks the company was capitalised with 5 million pounds in the bank, was capitalised at over 2 billion pounds okay.  So again it had gone from the city pages to the consumer pages, I was getting calls from – because our pictures were splattered across the papers – from relatives in Australia and South Africa saying ‘what’s this Knutsford, should we buy any?’ and I remember the Daily Mirror saying ‘sell your grandmother buy Knutsford’ and we put out several announcements saying ‘we know of no reason why the share price is doing what it’s doing’ but the press doing what the press does basically said ‘they are going to bid for M&S, they are going to bid for Sainsbury, it’s Archie Norman’.  Needless to say when the share price, the balloon was pricked at the end of the, it was as I say, the end of the dot.com era, the market cap went down to I think roughly 50 million.  For us, we put in 5, and it was worth 50 and we then went and did a deal.  We bought a financial services company so for us it was an extraordinary deal but the bit in between was just a phenomenon and it is still talked about in Business Schools.  I have to say you know, I don’t want to be kind or moralistic about this, we didn’t sell a single share, I mean we could have sold shares in the market place at this ridiculous valuation but we made a conscious decision not to because it would have been completely immoral.

Susan Freeman

Well I suppose it is an amazing accolade to the four of you that you know people looked and thought this is going to be amazing?

Nick Leslau

Yes, I think it was just exuberance of the market and Archie’s story.

Susan Freeman

Getting back to the real estate side of things, you left Burford in the late 1990’s and set up Prestbury with Nigel Wray?

Nick Leslau

Well with Nigel not on the Board, he was an investor.

Susan Freeman

Okay.

Nick Leslau

We’ve invested in most things together over the years.

Susan Freeman

And I think that did pretty well so the next couple of years it produced a return of 150% on NAV and the value grew to a few hundred million pounds?

Nick Leslau

Yeah yeah.

Susan Freeman

And then I think you took it private in 2004.  What was your thinking?

Nick Leslau

Yeah, yeah.  Well there were a lot of companies at the time which were trading at huge discounts and it was persisting.  I don’t know if you remember MEPC, that there was a management buy-out.  There were companies that were buying themselves out because of the duration of the discounts.  I’d always said and you probably remember from a BPF conference when I made the chief executive of Land Securities very uncomfortable when I was talking about disclosure.

Susan Freeman

Viagra?

Nick Leslau

Yes you remember the Viagra of the property market?.

Susan Freeman

Yes.

 

Nick Leslau

And at the time I said you know, I was kind of fed up with hearing chief executives complain about discounts, disclosure was one issue and if it was such a problem they should buy in their companies.  They should all liquidate them, you know and those are the answers.  If you’ve got, if you’re trading at a persistent discount, sell your assets and so that’s what we did.  We said rather than our shareholders suffer 30% or 40% discounts we will liquidate the business and we did and in fact we gave 105% back to shareholders because we got more than NAV so that’s why we privatised.

Susan Freeman

And actually I remember what you actually, you stood up and you said that the Viagra of the property industry needs is transparency.

Nick Leslau

And disclosure yeah.

Susan Freeman

And disclosure yes.  I think that was the only BPF conference I was allowed to get involved in and I think I wasn’t very popular afterwards.

Nick Leslau

Because?

Susan Freeman

Because…

Nick Leslau

You let me say it?

Susan Freeman

…no, no I couldn’t have stopped you saying it.

Nick Leslau

No you wouldn’t.

Susan Freeman

No but I think I think perhaps certain people felt they were being criticised.

Nick Leslau

Oh criticised.

Susan Freeman

Yeah.

Nick Leslau

Well they were in fairness but I have always been gobby but I wasn’t attacking anyone in particular, I was just… it was just an observation.  And in fairness the industry really got its act together and disclosure improved dramatically.

Susan Freeman

In the depths of the global financial crisis I think in 2009 you joined forces with Mike Round to launch Max Property and I think that was the biggest IPO in Europe at the time and that was probably quite a brave thing to be doing in 2009?

Nick Leslau

Well we had started, when I left after we had sold Prestbury, I started a club of investors including Unaskio, Johannsson who was the sort of Viking, Tom Hunter and a few others and we started buying and selling lease-backs in really quite large quantities and because of the financial crisis we stopped investing in the fund, we kept everything that we had in the fund but other people had other things preoccupying them and so I decided that I would set up a new quoted vehicle and it was a really, as you remember, you know, you will remember it was horrible. We were talking about not getting cash out of the ATM’s, the banks going bust  you know, Lehman’s went bust.  I mean it was really a very, very troubling time.  I actually remember we had a lot of cash on deposit at one stage and Sandy, my long suffering CFO who is absolutely brilliant, tried to get in touch with our banks to move the cash, then saying they were going to move the money from banks that were looking under threat to HSBC and HSBC rejecting our cash because they had too much cash coming into the bank.  That’s how calamitous things became and how, I think people have forgotten that and certainly the innocence of being sub-30 means you won’t remember that at all and it was terribly scary but anyhow I decided that we were going to start a new public company and about 3 weeks, maybe 3 or 4 weeks before we floated I was doing a panel at Nomura which Mike Pru at the time had organised and Mike was on the same panel and I had always really admired Mike for, he is one of the smartest more cerebral thinkers, I call him the professor but he is a real thinker and super smart and we shared a car on the way back to the West End afterwards and I asked him what he was doing and he said that you know, he was moving on from Helicorp which had surprised me because I thought he was going to be there forever but he was looking for another challenge. I said ‘well I am doing this thing, do you want to do it with me?’ and he sort of went ‘okay’ and 24 hours later we had a deal and so that’s how we came together to do Max and  yes it was the largest IPO actually in Europe that whole year in 2009 and we only raised 220 million which just goes to show how you know, how febrile the markets were then and Max then went off, and we started buying things like Industrious which was 8 million square feet of industrial space in Catherine’s Dock and we bought some chunky assets in a very short period that appeared after the financial crisis where deals were cheap because things suddenly started getting very expensive again so that was Max which was launched as a limited life vehicle and did really nicely for investors and then we sold out of that as we said we were and then we took the sale of lease backs and then launched Secure Income REIT which I think now is the eleventh public company that I have done.

Susan Freeman

Is it really?

Nick Leslau

It really is yes.  But I mean some of the other public companies have been in restaurants you know which we did with Damien Hirst and we had a group called Hartford, The Pharmacy Restaurant which you may remember?

Susan Freeman

I remember yeah.

Nick Leslau

And we had publishing, intellectual property and so it has not been property.

Susan Freeman

And the secure income is long-term income, long leases?

Nick Leslau

Really boring, very, very long-term income. In the size of business it is the longest leases in the sector, in the REIT sector and they are let to outstanding covenants on the whole, very, very long leases with RPI sort of you know, inflation protection, upward only reviews and for 70% of the portfolio guaranteed by the global parent.  So they have earnings from all around the world so they are not UK dependent and that’s… the idea of that was to offer a secure growing dividend to investors.  Very different to the sort of rather more sex and violence end of real estate that I have been involved with over you know, 30 odd years and we recently you know, we bought the Manchester Arena, we bought a bunch of Travel Lodge, so it’s a wonderful business but once you’ve bought the assets you kind of don’t do anything.  You send out for rent demands and it is getting harder and harder that business because the market is getting tighter and tighter.  Everyone wants to match long-term liabilities and wants long-term secure income and very few companies are writing long leases anymore so it is becoming increasingly rare so on the one hand it is difficult to buy, on the other hand the existing assets are growing in value so you know we have been very fortunate.

Susan Freeman

So what is going to be next?

Nick Leslau

Phoar, well I became a grandparent for the second time recently so…

Susan Freeman

Did you?  Congratulations.

Nick Leslau

…so maybe they will have to come into the business, that’s what… I’ll have to train them.  I don’t know actually, that’s the exciting thing is that I don’t know.  It is very difficult in this world that we live in, none of us have experienced before, QE is polluting and perverting everything that we know as normality and even forget this Brexit fiasco that’s going on, which you know, will end…

Susan Freeman

Do you still support it?

Nick Leslau

I absolutely support Brexit and for reasons that I won’t go back into but for what I consider to be genuine interests of the country, in the medium to long-term but not withstanding that, democracy spoke and its being frustrated and that’s having an impact on the market as well you know, I think it is embarrassing on a global stage. What’s happening is embarrassing because democracy is being thwarted by the country that for centuries  has led democracy, you know, so it doesn’t matter which side of the fence you are on in this debate, what’s happening is really not good for the UK.  Against that background the economy is stagnating and I think is actually going backwards a bit now and the real estate market has become completely constipated, no one is doing anything even though the underlying assets are I think now are under performing, you are getting no transparency because there is no visibility in this stuff because no one is trading because why would you trade with 8% frictional costs, you can’t replace anything so I think we are in a bit of a downward, gentle downward spiral and it’s very uncomfortable.  So when you say what’s next, against that background, probably fishing.

Susan Freeman

Fishing.  But then there are bound to be opportunities because it is a sort of quite a strange path.

Nick Leslau

Well that’s where QE is polluting things because assets that would otherwise be inexpensive, bearing in mind we have sort of been on a ball market run since the financial crisis, we haven’t really seen that correction that you would see in a normal cycle and the reason is simply because of negative interest rates.  So people investing in assets, they don’t really either understand or are performing and even the rental streams will be vulnerable but they are kind of going well the alternative is if I stick my money in the bank.  Bonds, you know, forget about bonds the way they are now, equities are fully priced although personally I still think there is value in the equities market but volatile so property offers quite an interesting dividend return but if you look it in PE terms but actually it’s actually very difficult to find value so it’s frustrating but you know as you say, there is always opportunity.  I suppose one of the things that I’ve really enjoyed in 35 years in property is off market transactions.  We very rarely, I can’t remember in fact the last deal we did that was on market.  We like off market but in today’s world everything is on market, you know the property has been commoditised so it is very hard to find value in the imperfect markets that we used to know which is a shame.

Susan Freeman

So you are investing in PropTech now and that obviously is a different sector from real estate.  Are you seeing any, any interesting trends there?  What are you finding interesting things to invest in?

Nick Leslau

To put it in context I am investing small amounts of money and I started investing in PropTech really to try and find out what I am missing, technology is this wonderful sort of generic word that covers everything that involves a computer that I probably don’t understand but PropTech; I was curious about PropTech because what is PropTech?  It’s sort of people re-imagining real estate and real estate services through technology and there are the categories you know, you might be a disrupter or you might be an improver or I have to say I have become a little bit despondent with PropTech in that I have seen a lot of small companies with ideas.  You’ve got the normal problem of someone might have a great idea but is completely incapable of selling anything, they just don’t know, they haven’t learnt to sell anything.  They need to go and work on a market stall but on the whole what surprised me is the number of people that are doing very similar things and when I asked them who’s in their market place doing these things, they have no idea.  So there is a naivety borne of a good idea and yet they really don’t understand that you have to know your market place and I hear a lot of people saying ah but CBRE have, you know, taken it.  Well actually CBRE are trialling everything you know, they are the largest in the market and they will trial everything and that’s not the answer to what’s going to build a business.  I also find that people have presented me with ideas which are jolly good ideas but for which there is no market.  You know, when I ask them ‘where’s your market’ they say ‘well the property market is gazillions of pounds and we only need a small percentage of it’ and that really isn’t the answer to my question.  I have invested over the years in many, many small companies and if I can’t see a pathway through to an earning stream then I am not going to invest.  The one thing that has come off dramatically is I think probably 3 years ago, 4 years ago everything was valued at 3 million pounds and today the market has become more disciplined about valuation but I do think it is one of the vulnerable spots in the real estate market generally is that there are a lot of small PropTech businesses that aren’t making money, that the bank of mum and dad have been bank rolling and where the kids have been taking small salaries but that money will eventually stop and I wonder what that means for PropTech but it is very difficult  PropTech doesn’t mean it is going to be the answer to, to your prayers when you put money into it.  It’s not.  PropTech has to have a raison d’etre, there has to be a really good idea and the management has to be really good and if the management isn’t, managements make you a fortune and lose you a fortune.  You get good ideas and bad ideas but the management will do really, really well for you or really badly.

Susan Freeman

So maybe we need more transparency in PropTech as well because if there was a central database of every you know, new start-up then people would actually know who their competition is?

Nick Leslau

Except they are the opposite, they are very guarded and secretive about what they are doing and you have to sign an NDA.  I signed an NDA the other day on a business that was doing environmental controls and I think it was the third one in that month that I had seen doing broadly speaking the same thing and I had to say to them ‘you do know others are doing, and that’s only what I see and I see a fraction of the market, you know, others are doing the same’, ‘ah yet but they are not quite the same, we’re different’.  And the answer is not difference enough and yes there will be winners and losers but at the moment as I say, I am slightly despondent because I am seeing very few winners and lots of companies that I know are going to  fizzle out.

Susan Freeman

So you have to kiss a lot of frogs as they say?

Nick Leslau

That’s exactly right.  Well that’s actually the investment strategy of small businesses.  You know you have to invest in lots of them and then if you are lucky you will get one or two that will shoot the lights out and probably the rest will be left either bust or by the wayside.

Susan Freeman

Unusually for a property investor, you’ve also been on television, the Channel 4 Secret Millionaires?  I think that’s going back 2008.  You spent 10 days posing as a social worker in a really deprived part of Glasgow but I don’t know if you remember you were described as coming across as businesses answer to Boris Johnson?

Nick Leslau

Good grief.

Susan Freeman

But that must have been the most incredibly difficult experience?

Nick Leslau

I thought you were going to mention the BBC series I did with Jo Malone which I was more embarrassed about and now I’ve mentioned it I will probably doubly embarrass myself because I wasn’t very proud of that.  Secret Millionaire I was, it was completely different and the truth is my wife didn’t want me to do it and I got what she was saying because it was giving away money on TV is really gross you know, it’s like if you want to do it, do it privately but I had seen another property chap, David Pearl who had, David had done a programme in the series and I had only seen two and his was one and I was really moved by the Secret Millionaire he did and I thought bugger it, I thought you know we’re down here once, which seems to be my approach to most things and you know, let’s have a go and so I was transported to a part of the UK, East Glasgow where the average life expectancy is lower than if you are born in Calcutta and most of the men I worked with there have died since I did the filming there which is just tragic, 52 years is the average life expectancy from there and that is because of heroin addiction, gangs you know, just living, diet, all sorts of things but it was a profoundly moving experience for me.  It was genuinely you know, I saw parts of life that I had no, in my privileged sort of you know world, that I had never seen and I actually found that there were – I feel slightly odd saying this – but there are real angels around.  There are people who day in, day out help the disabled, the disadvantaged you know, the ones that have fallen through society’s net and these people do it without thanks or third party approvals or approbation you know, they just get on and they do it, day in, day out and that was such a, you know, a restorative in the sort of human condition, seeing you know, we know that there are people who are very poor, we know that society allows people, inexcusably, but people do fall through the net and yet the ones that pick them up we don’t hear about and I met some really quite phenomenal people so it was, it was 10 days that I will never be able to recreate but it’s on film and like when I am feeling a bit down or something, not that is particularly often in my case but I have picked up the video and had a look at it and reminded myself.  It was amazing and for me it was a you know, it was a little bit of a journey of self-discovery but I loved it.

Susan Freeman

And did it change your approach to the way you deal with things?

Nick Leslau

I’d love to sound really worthy and say it did but I think the truth is we all revert to what we do and you know, I compare the experience to you know, if you lose someone very close to you and you are in the pits of how, you know the depths of your feelings, we are good, we are very adept at, human beings at changing and altering our state and a week later going back to complete normality and I felt that, I was definitely moved and it definitely affected my philanthropic efforts in terms of getting to the coal face as opposed to just you know these big charities where you just write a cheque and so in that sense it did but I don’t think it changed my journey that way. I know that’s being brutally honest about it.

Susan Freeman

I know one of the things that you said is that the property sector as a whole isn’t vocal enough about the good things that it does and we are generally not very good at sort of telling the positive stories and that still seems to be the case.  I don’t know if you have got any thoughts as to how one could improve the image of the sector as a whole because there is so much charitable work that goes on and so many positive things?

Nick Leslau

Well I do think there is some very good things and I also think there is some very good things in business generally.  I was up at Edinburgh University last week giving  lecture and I then did a sort of, some group work with about 15 wonderful students who are doing business studies there, undergraduates and I asked them for their motivation, I asked them about their motivations and some of them were almost embarrassed to say that they were doing business because they wanted to make money and making money is entirely worthy of itself because the wealth of society is created by people who make money and pay their taxes in order that the State can afford to look after the people who can’t afford to look after themselves.  That’s what the wealth of society and the wealth of nations is all about and the property sector has been apologising for itself for a long time.  It’s roots in feudal landlord/tenant relationships are deep rooted.  You know the DNA of property, why do we use the word ‘landlord’ that is a feudal term, ‘tenant’ toiling… you know, I mean it really is extraordinary that we are still using that terminology.  What will change is the likes of WeWork, ignoring the financial difficulties and capital structures and all that nonsense.  WeWork’s has captured the zeitgeist of people’s occupation of space these days.  People are now starting to look at space as a functional area and with shorter, all-inclusive leases but it is a community.  The more that happens, the more we will lose this landlord/tenant nasty thing and we will actually be perceived as a genuine contributor to the value proposition of the wealth of society.  At the moment when you grant some, you are a landlord and you grant someone a 20 year lease, go away and don’t come back for 20 years, it is very difficult to say ‘I am adding value to society’ but if you are running a building with a thousand tenants in there and providing services in the right environment, and community and networking and events, then you are like a hotel operator and I think that will help change the perception but as an industry, we do quite a bit and business generally does a huge amount including, we are so conscious of the environment, sustainability, all sorts of things now you know, the stock market indices on you know, environmentally friendly business, social response, socially responsible business so I think we are going to change by virtue of the fact leases are becoming shorter ironically and the perception of us will change and then maybe we won’t be the lowest hanging fruit for Government to tax and you know an obvious target to grab money from which has historically been the case.  Properties are really easy assets to tax.

Susan Freeman

Interesting I think even in your Burford days you were quite sort of service orientated and very much aware of the idea that you know the tenant was the customer because it has taken quite a long time for the property sector to actually get there.

Nick Leslau

Well in those days, in those days that gave us an advantage because I think probably 30 years ago we were the first, by many years I think, the first company to introduce, instead of having sort of cigarette smoking commissionaires that sat and read their Sun newspaper in the entrance hall, we spruced them up, we put the very smart looking staff in Donna Karan, we had valet car parking at buildings in the provinces, all to get an extra few pence per foot for rent.  We had gyms, we had saunas.  We put things in that no one else was doing.  Today everyone looks at that and goes ‘der isn’t that basic?’ but at the time it was ground breaking.  I learnt so much actually, I mean we started that process but then when I met Ian Schrager, you know the Studio 54 guy who had pioneered boutique hotels and we did a joint venture with him at the St Martin’s Lane Hotel and the Sampson Hotel, I learnt that what we had been doing was making common area sexy.  That’s what selling is in real estate you know, in real estate all we do is flog space, that’s basically what we do, we can make ourselves sound much more you know, important than that.  We just flog space and the quality of the space, the location, the nature of it, we are just selling different types of space and we happen to be doing it quite well in the 80’s and had kind of thought this through perhaps a bit more whereas today everyone is doing it because they have to do it because leases are getting shorter and tenant retention is becoming much more important but Ian taught me that it didn’t matter whether you were you know, selling space on a multi-let building or the space itself, if you make it sexy when people walk in, they feel good about themselves so you know we advanced it and then our commissionaires who were these good looking young people would take… someone would come in and they would be taken to the lift and shown the lift, not just point to it and to this day, landlords are incredibly lazy, you know there are buildings where you go into, huge buildings, I won’t mention but there are a few in the City where you go in and you can’t find where you are supposed to go and no one is very helpful when you get in there or you have to stand in a queue for 10 minutes to sign in to get to the spot you can’t find so it’s you know, there are still landlords who are feudal in their approach.

Susan Freeman

This is true, hopefully it will change.  Just one final thing, one of the things you said I think around the time you were doing Secret Millionaire was that you said you know, people always tell you that you know you are wonderful because you are the client and you felt you know, they were you know having to say that they liked you but you are the only client that I can remember that actually went out and bought pizza for the whole of the team when we had a late night meeting, we were sitting there with our polystyrene cups and it was before we actually had in-house catering and you actually went out and bought everybody pizzas and I thought well that’s very unusual for a client.

Nick Leslau

I don’t actually remember that but I am glad I did.  It’s funny though isn’t it because as I was saying to these students the other day, you know it’s so important, small things are really important.  Being nice to the person who is sitting on the desk at the front, they are as important to an organisation as the big money earners.  There is no better way of flattering people than by asking them questions and there are some little techniques about, and I am calling them techniques because they are I guess a learned behaviour, someone must have taught me that because I don’t think it’s in aids but I just think you do things that are nice and people remember them.  There are so many arseholes in our industry, there are so many arseholes in business generally and you see them all the time and we always remember that little coffee shop where the person serving, the guy or the girl was really nice, friendly and even if the coffee is not great, you might go back and give them a second go, they were nice and friendly to you.  If they are rude and the coffee is… you are never going back.  I just think it’s just a life lesson.  People remember.  It is funny that you remember that and I am happy that you remember that and I am really happy I did it.  I was probably hungry and I felt guilty.

Susan Freeman

I think you were just so unimpressed with the catering but yeah, anyway I think that is probably a really good life lesson to finish on so thank you very much.

Nick Leslau

A pleasure, nice to see you.

Susan Freeman

Well that was pretty amazing hearing from a real property entrepreneur who has very successfully weathered a number of economic cycles and for the record he really is one of the most generous and nicest people in property.  So that’s it for now, I really hope you enjoyed today’s conversation.  Please join us for the next Propertyshe podcast interview coming your way very shortly. 

The Propertyshe podcast is brought to you by Mishcon de Reya in association with the London Real Estate Forum and can be found at mishcon.com/Propertyshe along with all our interviews and programme notes.  The podcasts are also available to download on your Apple podcast app, the purple button on your iPhone and on Spotify and whatever podcast app you use.  And please do continue to let us have your feedback and comments and most importantly, suggestions for future guests and, of course, you can continue to follow me on Twitter @Propertyshe for a very regular commentary on all things real estate, PropTech and the built environment.

Nick Leslau, 60, has been Chairman and Chief Executive of Prestbury group of companies, which invests in and manages over £3bn of property assets, since he founded it in January 1998.  Nick is a Fellow of the Royal Institution of Chartered Surveyor and  was co-founder and Chief Executive of Burford Holdings Plc for 13 years until 1997 having created a £1bn net worth company and delivered 1,300% NAV per share growth over a ten year period as a quoted company.  He sat on the board of Max Property Group PLC, which he founded in 2009. The company was sold to Blackstone for £650m in July 2014. He and his management team floated Secure Income REIT PLC in 2014 currently with gross assets of £2.4bn including Thorpe Park, Alton Towers, 21 private hospitals 135 budget hotels all let on very long term inflation protected leases. He has been a director of many quoted and unquoted companies, professional bodies and charity and educational boards and is a director of Saracens Rugby Club.

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