Creating an independent property holding company and listing it (2006)

Stepping out from under the umbrella

At the centre of this decision, one may read, was the widening of where the money comes from — from banks and the parent group to the capital markets. An equity ratio below 9% is thin for a business that buys land first and lets it sit. There is a limit to how far you can grow on borrowings, and that limit was setting the scale of development. Establishing a holding company, tidying the ownership structure and admitting outside shareholders — the sequence of steps from 2004 to 2006 was less a decision that changed the content of the business than one that changed how the business is fuelled.

Stepping out from under the capital umbrella, though, also means moving of your own accord into a position where the numbers are questioned every quarter. Two years after listing came the financial crisis, and ordinary profit for the year to March 2009 fell 60% against the year before. Even so, the company put the equity it raised in the market into land acquisition and waited out the next cycle while holding the assets it had bought. A property company born to look after a securities firm’s building, and led ever since by executives from that securities firm, standing itself on the side that the market prices — reckoned from 1957, some forty-nine years on, that choice carried a fitting weight given where the company had come from.