Last week voted the most powerful woman in property, chief executive of the Crown Estate Alison Nimmo must now tackle the problem of Scottish devolution. Hardeep Sandher reports. Photography by David Vintiner
Alison Nimmo, the new chief executive of the Crown Estate, has one request: “Please don’t lead the article with ‘the first woman to chair the Crown Estate’,” she laughs quietly.
Having become chief executive in January of the Queen’s property company, Nimmo wants to be recognised as the best person for the job, rather than for her gender — even if she was voted top of Property Week’s Women’s Power List last week.
During a distinguished career in public sector regeneration she helped lead the bid for the London 2012 Olympics and oversaw the planning and development of the Olympic Park. Still, many in the private sector will struggle to place her.
“I do keep a low profile,” she admits in her first interview since taking the helm of the Crown Estate. Nonetheless, Nimmo has worked under three significant leaders — Sir David Higgins, Sir Bob Kerslake and Sir Howard Bernstein — in three separate roles during her career. And her services to regeneration were recognised with a CBE in 2004.
She is one of the toughest negotiators
Sir David Higgins
But it is as leader of the Crown Estate that Nimmo will have the chance to make her mark on the property world. She took over from Roger Bright, who retired at the end of last year after 10 years at the helm. He left a business that has regularly outperformed the IPD total return index, a £7bn portfolio that extends to the coastal seabed around the UK and a development pipeline worth half a billion pounds in London alone.
As Nimmo says: “Who wouldn’t want this job?”
Quite a few people, as it happens. Bright may have transformed the company into a modern and flourishing property developer-manager, but the next decade may pit Nimmo against an independent Scotland in a fight for the Crown’s assets. Moreover, under a sovereign grant announced last year the Royal family will receive a percentage of the Crown’s annual profits, instead of contributing surplus revenues to the Treasury, as had been the case since 1760, when King George III gave up the income from the estate in exchange for the civil list.
“I love solving complex problems,” says Nimmo.
“I have inherited a business in good shape but, as with all these things, there is an exciting 10 years ahead.”
Exciting is not how many would describe being catapulted to the heart of a political battle between central government and Scotland. In addition to Scottish independence, first minister Alex Salmond has made devolving power from the Crown Estate a priority.
In March, MPs on the House of Commons Scottish Affairs Committee said the Crown Estate was operating with an acute “lack of accountability and transparency” in its activities in Scotland. The Crown Estate, it said, was only working for its own interests and acting like an “absentee landlord or tax collector”.
The Crown Estate owns almost all of the UK’s seabeds and 55% of the foreshores within the 12 nautical miles limit. In its most recent offshore programme, round 3, it has identified nine zones for development around the coast.
“The main issue in terms of unhappiness is around the coastal estate and a lot of it is caught up with the politics of devolution: ‘big p’ politics and
“We are having a pretty hard look at the estate and our plans, and thinking about how we can be better at delivering what we do by working more closely with the key players in Scotland. We will try to be more transparent and look at how we organise business there.
“But the difference between this [and other assets in our portfolio] is that it is of national and strategic significance to all governments in terms of energy policy. At the moment, in terms of percentage of the business capital and income, it’s relatively small: 1.5% of energy is generated from our offshore wind farms.”
The percentage is growing quickly, however, and the estate increased in value by more than 30% in 2011. The Crown Estate is investing more than £200m in the renewable energy sector through development on its marine estate. At present the Scottish government has made no announcement about how it plans to devolve power or even when, but the threat continues to hang over the Crown Estate.
“Politics — it’s always a tricky environment,” says Nimmo. Nevertheless, she insists the Crown is still committed to doing business in Scotland.
“We have a good relationship with Scotland and the Scottish government, with huge amounts of work going on in terms of their ambitions with offshore energy.
“But devolution and independence is a big political issue and one that we are sitting on the sidelines of, really. It is between central government and the Scottish government. In the meantime we will keep our head down and keep doing what we do in Scotland and look at how we can address their concerns and fine tune the way we do business.”
Although softly spoken and apparently relaxed about such a vital issue, there is no doubting her quiet confidence. This is Nimmo’s strength as a business leader, says her former mentor and boss, Sir David Higgins, who says it would be easy but silly to misread her.
The assets [outside London] are generating more than £100m in rental income, so I feel comfortable about the spread of the portfolio
Her career history in public sector regeneration — before the Olympics, she helped to rebuild Manchester after the IRA terrorist attack in 1996
and was head of Sheffield’s inward investment agency — does not make the most obvious candidate for the job. Higgins, who worked with Nimmo when he was chief executive of the Olympic Delivery Authority and she was director of design and regeneration, is quick to disagree.
“She is one of the toughest negotiators,” he says. “She has so many relationship strengths, so she can relate to everyone and every situation, to come up with the best solution every time.”
Berkeley Group chairman Tony Pidgley seems to agree: Nimmo became a non-executive director on his main board last year.
Her main focus now will be to keep the Crown Estate on track with its record performances. Following a change to the civil list last year, 15% of the Crown Estate’s profits will be paid directly to the royal family, instead of the Treasury redistributing surpluses, as it has done since the 18th century.
Nimmo insists this will not alter the way the company operates or does business. In simple terms the reform of the civil list is simply a formula to keep up with inflation. The Treasury will effectively remain the Crown Estate’s main shareholder and it will receive the money as it always has.
The Crown Estate aims to raise profits to £250m by 2014 from £230m in 2011.
“They are incredibly supportive and hands off,” Nimmo says of the Treasury. “Aside from agreeing with us what we will do at the beginning of the
year, they let us get on with it and it’s a really great partnership. I guess as long as we keep giving them super-good returns, that is … “
The industry is very sociable — sometimes a bit too sociable, especially when you are trying to train for a triathlon
Continuing growth should be achievable. The “innovative” deals, as Nimmo labels them, such as with Norway’s Government Pension Fund Global in October 2010, which involved the sale of a 25% stake in its £1.6bn Regent Street portfolio, and its £500m regeneration programme in St James’s with the Healthcare of Ontario Pension Plan, will allow the balance sheet to fund the company’s future acquisitions and developments. In fact, doing business with partners is now “a part of the Crown’s DNA going forward”.
“Whilst it is a constraint that, because we report to the Treasury we can’t borrow, we have found an innovative way to fund what we want to do with someone that shares the same long-term values as us. We would look at doing more of these arrangements.”
It is yet to be determined where or for what purpose such partners would be sought, and they will be brought on selectively as Nimmo forms a strategy that focuses on creating a balanced portfolio.
This has already been done in part. In the past two years the Crown Estate has invested almost £300m outside London in retail assets such as the Westgate Centre in Oxford and 13 prime out-of-town retail parks. The assets have a combined value of £1bn and have reduced its exposure to central London from a high of 80% to around 70%. Nimmo says this is a good balance and future acquisitions outside of London will be limited.
“The balance makes us well positioned but we will be cautious this year and, as a result, you won’t see as much activity. I am not saying we wouldn’t buy any more, but the assets [outside London] are generating more than £100m in rental income, so I feel comfortable about the spread of the portfolio.”
One focus will be on rural sites. The group has a £1bn rural estate which includes 360,000 acres of agricultural land and forestry, which, as well as being used for livestock and dairy farming, can in some areas be unlocked for housing. This estate could deliver several thousand new homes by 2020 in locations such as Hemel Hempstead, Luton, Thetford, and Bingham. In December the Crown Estate received planning consent for 580 homes in Taunton, Somerset, where it owns 4,000 hectares of land.
This is not a change for the group, however, but simply about realising the opportunities available, which Nimmo, as chief executive, aims to bring to the forefront.
“You don’t realise how much potential there is in the portfolio — it’s huge outside of the super-prime London assets — and it is one of the reasons I wanted to join the Crown,” explains Nimmo.
“I wanted to run a business, something commercial that was driven by strong values and where I could make a difference — not just a profit.
I have arrived at what is an incredibly modest organisation for what it does.
“Part of my agenda will be to make sure we speak more loudly about it all.”
1985: Received BA (Hons) in Town and Country Planning from University of Manchester
1991: College of Estate Management degree in Surveying
1986: City of Westminster Council, planning and transportation — policy and development control projects
1989: Drivers Jonas, associate partner, focusing on public and private sector regeneration projects in the UK
1995: KPMG, consultant
1996: Manchester Millennium, project director and part of the task force responsible for the regeneration of Manchester city centre after the terrorist bombing in 1996.
Nimmo was seconded from KPMG and secured £83m to rebuild the city centre alongside Sir Howard Bernstein
2000: Sheffield One, chief executive of the agency which was a partnership between Sheffield city council, which was then led by Sir Bob Kerslake, Yorkshire Forward and English Partnership
2003: London 2012/Interim Olympic Delivery Authority, director where her position included helping to draft key parts of the “Bid Book”
2006: Olympic Development Authority, director of design and regeneration under chief executive Sir David Higgins.
Nimmo on regeneration: “I love cities and learning how they work. It always feels like an extra special challenge to mend places, which for some reason or another are not working. After helping to unlock potential and revisiting them, the transformation is amazing.”
MY WORKING DAY
I am lucky that I live in the middle of London — in Borough — so I can get up at about quarter past six and be in the office by about eight.
It is a bit of a cliche but since I joined, there hasn’t been a typical day.
I started working at the Crown at the end of last year. Roger [Bright] was incredibly generous with his time and I wanted to get to know everything and be prepared if something went wrong in my first few weeks. Luckily it didn’t.
I have spent my first four months at the Crown getting out and about around the business at least once a week and have visited everything from Westgate Centre in Oxford to the rural estate around the country and Scotland too.
During my day I attend a lot of stock selection committee meetings where we review our portfolio and decide what changes will be made. I also write a weekly blog for our intranet, keeping everyone up to date on my travels around the estates.
My evenings are filled with lots of work-related events. The industry is very sociable — sometimes a bit too sociable, especially when you are trying to train for a triathlon. I am not going to tell you where it is — it is my first one so I need to do it quietly. Although it is on Monday and squeezing in training for it has been a challenge.
In the evenings I also like to make the most of being in London. I love the theatre and recently did my bit for localism by helping the Southwark Playhouse avoid getting decamped out of London Bridge.