I have never met Colm Lauder, but I reckon we would get on well. 

We share a healthy scepticism about the commercial property industry and its remarkable ability to spin any negative into a positive.

Lauder is a real estate analyst at brokerage firm Goodbody and has never been afraid to tell it how it is. Judging by the number of people in the commercial sector that I’ve annoyed over the years, I reckon I’m the same.

Like Lauder, I don’t take much notice of what I’m told to focus on. So when Great Portland Estate’s spin doctor told me the most important figure in

this week’s annual results was the 6.2% increase in like-for-like rent roll, I thought there was probably a figure they did not want me to focus on quite so much – like the NAV figure that GPE and every other REIT, for that matter, have been hailing almost every year in the decade since the global financial crisis. Probably because it wasn’t as impressive as in previous years.

At least it was up 1%. British Land reported a 6.4% fall in NAV for the last full year and Landsec’s is down 4.5%. In this company, GPE boss Toby Courtauld appears to be sitting pretty.

Things don’t look quite so rosy for British Land’s Chris Grigg and Landsec’s Rob Noel. Of course, the big REITs have an excuse for everything. For Grigg and Noel, it’s the hit they’ve taken as a result of the mauling the retail sector has had in recent years. But let’s be honest, they should have seen it coming. Instead, they overpaid for huge shopping malls that people are not keen on any longer.

The big REITs also like to offset the bad news on retail by telling us everything on the office side of the business is going great guns. But people like me and Lauder are not so sure.

After each of those big REITs reported their annual results, Lauder made the same point. He thinks all three are about to experience a softening in office values. It’s becoming something of a theme for him and I can’t help but agree – not least because it already seems to be happening. Landsec’s offices are already on the turn. OK, so it only lost 0.1% in value from its London offices last year, but a loss is a loss.

Again, Grigg, Noel and Courtauld all have a line on this. “No matter what happens with Brexit, London will always be different to the rest of the UK. It has such a powerful case. There’s limited supply and we don’t see demand falling for grade-A office space,” said… well, any of them really. Take your pick.

Lauder and I have heard it all before. “Values will never fall,” cry the REITs. “Oh yes they will,” we say.

I am often accused of being too harsh when it comes to the guff we’re fed about the prospects for the industry, so I’ll leave it to Lauder to say it how it is. This happened to be about Landsec, but, again, could apply to any of them. “With a heavier decline in London office values, as we expect, the outlook for the full year to 2020 will be one of limited optimism.”

That’s an analyst’s view, of course. Property people will no doubt remain the die-hard optimists they have always been…

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