EDITOR’S COMMENT Who would be a chief executive of a listed property company right now? Especially a retail landlord. Life running retail assets is tough. Doing so on the public markets brings scrutiny every single day. From investors and, of course, from the media.
The announcement that Hammerson chief executive David Atkins is stepping down after more than a decade in the role wasn’t unanticipated.
There have been many in the industry wondering when Atkins might leave Hammerson. I’ll admit it’s a question I have asked several times over the past few years and an announcement I have been expecting for some time.
It would be easy to give Atkins a hard time today – many will – and easy to forget he had big shoes to fill taking over from John Richards.
Richards had steered a relatively steady ship at Hammerson – probably thanks to having Peter Cole alongside him. The business stood up well against its listed rivals, with a share price relative to that of Landsec, British Land and SEGRO.
And in perhaps choppier waters over the past decade, Atkins’ ship has often appeared less steady.
His disposal of Hammerson’s office portfolio in 2012 to Brookfield for £518m paid dividends for the Canadian investor instead of the REIT. Within two years, Brookfield had let more than 1m sq ft of space across the portfolio while yields on City offices compressed by more than 100 basis points.
Since then retail, which now makes up almost the entirety of Hammerson’s portfolio, has continued to be plagued by administrations, CVAs, “rightsizing” initiatives and, of course, the consistent growth of online shopping.
More recently, Atkins led a failed £3.4bn takeover of rival intu, rejected, with “no regrets”, a £5bn takeover from French shopping centre operator Klepierre and sought to create a special “relationship agreement” with activist investor Elliott Advisors. On his watch, the REIT’s share price tumbled from a high of 699p in 2015 to a low of 43.5p in May this year, a 94% fall.
Over the same period, Landsec has gone from a 2015 high of 1311p to a February 2020 low of 314p (down 76%), and BL from a 2015 high of 875p to a February 2020 low of 313p (down 64%). SEGRO, the new darling of the listed sector, has seen its share price steadily increase from its 2015 high of 443p to a February 2020 peak of 933p (up 111%). Its low of the current cycle was 659p in March (still a rise of 49% on 2015).
I have – in a roundabout way – called Atkins arrogant on these pages before. I have called him that knowing that I’m a touch arrogant myself. I’ve called him that not necessarily as an insult. I think leaders have to be a bit arrogant. You have to believe that what you are doing is the right thing – but you also have to admit when you’ve got it wrong. And that someone might be able to do the job better.
We have not always seen eye-to-eye. My take on the world, on his business, has not always chimed with Atkins’ own. But, in our last few conversations, his passion for his business and his team at Hammerson has shone through. That should not be overlooked.
It’s easy to talk about the loss of value, the failed takeovers, the singular focus on retail. But don’t forget that when Atkins stepped up, he led five years of rising share prices. During his tenure he has also supported the business to become the first property company in the world to commit to not just eliminating its carbon emissions, but to becoming carbon positive. To not just stop destroying the planet, but to help it get better.
It’s a tough gig being CEO of a listed property company when times are hard, and Atkins has had a beating. His successor will need a thick skin. It would be easy to argue that he should have stepped down earlier, that he shouldn’t have done some of the things that he did. But I’m sure we can all have that argument with ourselves every day.
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