The CEO of FTSE 100 property company Land Securities says it’s not up to boardroom folk like him to decide the outcome of June’s referendum on membership of the European Union, despite acknowledging that “an exit could be painful for the property industry and those it supports.”
Robert Noel, CEO of Land Securities, says in the company’s full year results: “There is a higher principle at play here. This is a decision for the British people, not businesses. It is up to individuals – including those amongst our customers, communities, and partners – to decide what’s best. As guardians of shareholder capital, our responsibility is to position the company so it can thrive whatever the outcome. That’s what we have done.”
Land Securities is the UK’s biggest commercial property construction and investment company. It owns well-known London office blocks such as the Walkie Talkie, One New Change shopping centre by St Paul’s cathedral, and the iconic advertising hoardings and building behind at Piccadilly Circus.
Noel says it’s not up to CEOs to weigh in on the debate over a Brexit — a “British exit” from Europe — despite acknowledging that he believes it would be bad for business.
We believe a vote to leave the EU would lead to business uncertainty while negotiations take place on an exit treaty. Uncertainty slows decision-making. Over the short term, we anticipate this would drive down occupational demand in our market. In turn, this would lead to falling rental values and a reduction in construction commitments, particularly in London. So an exit could be painful for the property industry and those it supports.
Noel’s decision to sit on the fence despite the consequences are not shared by most in the business world. CEOs and business leaders have publicly weighed in on both sides of the debate, but the most active posturing has been through investment in the campaigns on either side.
The various “Leave” campaigns have so far raised £8.18 million and the “Remain” groups have taken in £7.46 million. Much of this has come from rich businessmen, with the biggest single donation to the leave side coming from Peter Hargreaves, the cofounder of stockbroker Hargreaves Lansdown. He donated £3.2 million to the Vote.EU campaign.
Noel’s call for businessfolk to butt out comes as Land Securities reports what he calls a “strong performance” for the year to March 31 2016. The value of property Land Securities owns has increased by £907.4 million across the year. However, pre-tax profit dipped from £2.4 billion last year to £1.33 billion. That was mainly because 2015 was an exceptionally strong year for the London property market.
Land Securities sold off £1.4 billion worth of property across the year to pay down debt. Noel says: “Some have suggested our current market positioning is more prudent than exciting. I am happy with that description. As risk has been rising outside the business, we have been reducing risk inside the business.”