September 2009 Archives

Just a couple of advertisements this morning: London agents with their ear to the ground will know that the British Property Federation and Allsop are looking to move offices. But, just in case there is a stray landlord out there unaware of the requirement, here are the details. The BPF wants about 4,000 sq ft, north of the river and within lobbying distance of the Palace of Westminster. Allsop is looking for 15,000 sq ft a bit closer to the lights of Regent Street than their current home in Soho Square.

The reason for not simply telling both to go put an advert in EG, is that both the BPF chief executive Liz Peace and Allsop senior partner Neil MacKilligin came up with exactly the same answer when asked why move now - and not when their leases run out in 2010 and 2011. "Rents will be higher, incentives lower and far more tenants will be seeking space" was essentially the answer.

The BPF can call on some pretty fancy advice from members like Francis Salway, chief executive of Land Securities - who said don't delay. Allsop is Britain's leading auction house and so has its finger on the pulse. They seem even keener to move. London letting agents with their ear to the ground are presumably already mentioning to hesitating clients that well-informed occupiers are moving well before their lease break. A ploy that will no doubt increase the likelihood of the prediction coming true.

King's Cross must feel like the countryside to City agent Tony Gibbon. But last week's hiring of the pugnacious BH2 partner on a no-deal no-fee basis by the developers of the 67-acre site makes some sense. For the King's Cross Central Partnership mainstays, Hermes and Argent, have a dilemma.

The Partnership has already spent circa £50m prepping the whole site. They are unkeen to take on all the upfront risk development risk of this 400 000 sq ft block, even though Sainsbury's are very keen to take 300 000 sq ft for a new headquarters. The problem is that Sainsbury's is not keen to fully commit until they can see a way out of the lease on their Holborn HQ. That does not expire until 2013. 

                                             King's Cross Central CGI

So, is there anyone out there keen to forward fund the offices - and how can it be done? Gibbon failed to impress when he pitched for the King's Cross letting. But he has worked for Argent before and impressed them with his world-wide contacts and an ability to stitch together some very tricky deals. So, why not give him a go at coming up with some fresh funding ideas for King's Cross?

That said, the clock is ticking for Gibbon. Investors are just starting to become more risk-tolerant of development and more optimistic about end values. So the prospect of another bright spark simply wandering through Argent's door in Piccadilly grows as the economy brightens. But this is a tough one: come on Tony, you can do it.

The FT fails to mention this morning that former City golden girl Robin Saunders (pictured) is involved in a deal that will see Tesco insert £400m of its stores into a new fund called Index Linked Properties. Even so, the principle (as well as the principal) behind the fund sounds interesting.

Saunders is the photogenic American who used to make the headlines at WestLB bank before leaving after a tiff in 2003. In 2005 she set up a £1b property fund with dealmaker Paul Bloomfield. Not sure what happened to that. But Saunders runs Clearbrook Capital out of  25, Grosvenor Street. Last summer she announced the firm had a £1b to spend.

The FT says Clearbrook and DTZ are to manage Index Linked Properties: a name which betrays the cautious thinking behind the fund. It will be a closed-end Jersey investment company which will only add properties with index-linked leases to the £400m of stock that Tesco are contributing by way of sale and leaseback.

What can go wrong? Finding more of the same stock perhaps? There are now dozens of nascent property funds, many given to empty boasting of having £1b of "firepower". But here we have a fund that appears to have bagged £400m of safe and solid stock and only wants more of the same. Sounds like a buy.

DTZ chief executive Paul Idzik (pictured) was once offhand to a senior city journalist at the Telegraph Group. This rebuff to a friendly advance at a tennis tournament has not been forgotten. That may explain why the 48-year-old American appeared in the Sunday Times instead this weekend. But even under relatively friendly fire, Idzik does not distinguish himself.

By now, most have got the Idzik story: a 48-year-old abrasive American banker comes in to rescue a floundering agent by the use of necessarily tough tactics. Those tactics do seem to be working. Well done. But Idzik might have done better to move the story on.
Instead, the tale of how he saved DTZ is told once again - and told clumsily.

At one unfortunate point Idzik appears to mock the "British" manners of his clients. In another place he appears not to care that one-third of the staff are unhappy. He concludes with an awkward joke about his job being finished "when I don't have that natural look of paranoia anymore."

Even the paranoid have enemies, especially those who relish playing the tough guy. Idzik is a natural in that role. But his success in hauling DTZ back from the brink feels slightly in danger of being overtaken by a failure of grace towards the long-suffering staff - and a failure to give a client-reassuring vision for the business.

Today's Standard column discloses that Grosvenor has been offered a few bankrupt developments from Lloyd's £60m property loan book. But the Duke of Westminster is far from alone in being asked to work out a few stalled projects by the bank. Dozens of property companies have been quietly approached by Lloyds to tow away and fix impaired assets in return for most of the upside.

Much the same is going on at RBS, which has a £90bn property loan book. But this all has to be kept fairly quiet for obvious reasons; the banks dare not give the impression of a fire sale: for the "mark to market" value of these £150bn of loans is well under £100bn says one senior property banker. Nick Leslau put it more succinctly last week at a Movers & Shakers breakfast seminar; "the majority of what the banks have is crap, in fact it is beyond crap."

Maybe so: but an awful lot of work has begun to work this stuff through the system. Every major agent will have been hired by the banks and asked to sign confidentiality agreements. Valuers are putting prices on assets being inserted into the government Asset Protection Scheme. Investment and development experts are putting together work out-scenarios for the banks.

After Stephen Hester left British Land to save RBS, there was much speculation over who would get the top job. Would it be 44-year-old Tim Roberts, the former Drivers Jonas partner, who is the director in charge of investment and asset management? Or would it be 40-year-old Andrew Jones (pictured below), who spent 10 years at Pillar with Raymond Mould and Patrick Vaughan before joining BL in 2005, when former banker Stephen Hester acquired Pillar?

In the event, neither got the job. When Hester went back to banking, BL took on another banker in January this year in the capable shape of 49-year old Chris Grigg, who was chief executive of Barclay's commercial banking business. Being good soldiers Tim and Andrew stifled their disappointment and got on with the job.

But just nine months later came the oddly- worded announcement yesterday that Andrew Jones is "considering leaving British Land". Not going, but thinking about it. But where is he considering going? Shall we speculate? OK. But it is important to remember that what follows is based on total lack of knowledge of Andrew's intentions.

Which two men set up a very successful property business after raising £200m in 2007? Who are those two chaps, now in their sixties, who bought half of Meadowhall? Which pair of highly successful entrepreneurs now might be looking for a younger man with retail experience to run a business that has plans for full stock market floatation in a year or so?  Answer in paragraph one.

A startling sight at Savills yesterday: the famously parsimonious agent has spend what feels like a small six-figure sum doing up the reception area at their Grosvenor Hill HQ.  The IKEA and Carpetright feel has gone. Black marble cladding graces an entrance that leads to a reception dominated somewhat by a gently glowing Perspex screen showing a City skyline in relief. 

The man who badgered his fellow directors into this expenditure was John Rigg. Right now the German funds and banks that Rigg looks after so well are very active. But do the Germans want to enter the front hall of a firm that looks like it has seen better days?  No.  That was apparently the clincher for CEO Jeremy Helsby. He agreed to splash out. Last week the result was unveiled. No doubt Mr Rigg will be asked to provide a cost benefit exercise in six months.

The Daily Telegraph gets quite excited this morning over a deal done by  American private equity group  Bain Capital  to take 37 000 sq ft of space in Devonshire House for £90 sq ft.  This is pretty much the same deal as the one reported by EG in July 2008 as being nearly done at £120 sq ft.

Presumably that deal fell apart after the collapse of Lehman Brothers last September. Maybe because everyone got very scared: but maybe because Lehman had an interest in the former headquarters of Land Securities?

In March 2007 Lehman's backed the purchase fronted by American Steven Witkoff and DCD partners to buy the 190 000 sq ft block by Green Park tube station from Land Securities at a 4% yield. How Land Securities must have laughed. Three months after becoming a REIT, and no longer subject to CGT, they sell a building owned since 1955 for more than a quarter of a billion.

The 15 year lease has 32 months' rent free says Guy Taylor of C&W who did the deal for Witkoff. So that drags the real rent down to well under £80, even further if you include the free refurbishment being thrown in.  Even so, a good deal that will cheer up West End agents no end: especially perhaps the recently fledged H2SO who are trying to fill 100 000 sq ft for D2 in Savile Row.

Will Witkoff and DCD  be cheered?  A bit, perhaps. But not until the peak of the next cycle will anyone pay 4%. Meanwhile, it would be interesting to know if the administrators of Lehman still have an interest in Devonshire House: because right now the 2007 deal on the former home of the Dukes of Devonshire House is around £100m under water.

Kicking Network Rail for its abject failure to get on and develop over Euston, Victoria and Waterloo is about as pointless as the plan to fit a nightclub into a re-built Euston Arch revealed in the Architect's Journal today.

                                                         Euston Arch

British Land was chosen in May 2007 as partner for a 15-acre development that was put on hold this May. In January 2007 Hammerson was selected as partner for an 800,000 sq ft development at Victoria Station. That same year Network Rail promised by spring 2008 to find another hapless developer to partner them at Waterloo, since then, silence.

The credit crunch will of course be blamed. But BL, Hammerson and whoever is brave enough to take on Waterloo should share some of the blame. Network Rail and its predecessors have always been completely hopeless partners. 

Both Hammerson and BL are now under new management.  Both are now REITs. Long term development is not good for the steady earnings demanded by REIT investors. Will both keep throwing good seed money after bad? Or are they brave enough to pull out of station development?

At 1pm on October 15^th Jones Lang LaSalle will open on-line bidding for 100 000 sq ft of office space owned by food giant Proctor and Gamble says Bloomberg. The room-sale auction community need not be too alarmed by this leap into cyberspace; well, not yet anyway. For the property is in Dayton, Ohio.  

But JLL say they will now offer an on-line commercial auction service at www.auction.com  a residential site owned by the Real Estate Disposition Corporation. Yes, those guys who blitzed Sky TV with vulgar advertising in an unsuccessful attempt to break into the sale room market in the UK. That was a complete disaster. No more sales of repossessed properties are scheduled in Britain.

Will this on-line commercial model be imported to the UK by REDC and JLL? Who knows, it seems unlikely, as JLL has a thriving traditional operation. But CBRE does not. And a report in the Wall Street Journal says JLL's bigger brother is developing on on-line auction site of its very own. 

 Will it be long now before development in London wakes from the dead? The question came to mind on Friday after three seemingly unrelated events: the sale of 50% of Broadgate by British Land; the sale of a one-third of the Bullring by Land Securities - and the smile on the face of Mike Slade.

 On Friday morning the sailing CEO of Helical Bar entertained members of the Movers & Shakers networking club at the Dorchester during a Q&A session. Slade attacked Lloyds Bank as "an absolute shambles" and made Knight Frank's blameless head of commercial Alistair Elliott blush by asking "what exactly constitutes work" at that fine firm.

But between the banter Slade sort of hinted that Helical might start developing in the Capital again. But only sort of - suggesting "conditions are now right". That probably means he has at least one deal to do before disappearing down under at the end of the year to have one last shot at winning the Sydney to Hobart race.

Land Securities and British Land are now in a very different race than they were in the last cycle. Both are now REITs. There are no more CGT bills - a powerful incentive to sell long-held assets to pay off debt that has ballooned as a proportion of shrinking asset prices. Thanks to the sales of Broadgate and the Bullring, both firms now have headroom to look up and say "where now?"

Is BL preparing to pull the Cheese-grater skyscraper out of the cupboard? Who knows? But, a visit to Francis Salway in his spacious 7th floor office in the Strand last Wednesday found the CEO of Land Securities in chipper mood. So a report in today's Sunday Times suggesting LandSec's cerebral leader is shifting offices to make way for a visitor suite filled with models of new schemes is too good a tale to check.

Yesterday the Irish government agreed to pay €54bn for property assets once worth €77bn, said EGi. The price paid is about €7bn more than the current market value and a 30% discount to the book value.

A large chunk of the underlying assets lie in the UK. So, what happens next is not just an amusing sideshow. Ireland is a small and much interconnected state.

Will the small number of firms and individuals who borrowed the money be able to gain from the taxpayer's pain when prices start to rise?  The Irish government says the deal is subject to "strict limits and controls". We shall see.  

This agreement comes a few weeks before the British Treasury is due to announce a very different rescue package. The brutal negotiations between the Treasury and the two-state controlled banks over what is essentially a gigantic insurance scheme are about done.

An announcement on the Asset Protection Scheme is due by the end of the month, say the Treasury. The APS will cover most, but perhaps not all, of the £90bn RBS has at risk and the £60bn Lloyds is worried about.

There are concerns over  the date of valuation - last December - and whether the assets are valued individually or in large pools.

But, one way or another, the working out of the Irish and UK loans will be the biggest property game in town for a few years yet. Get to know your friendly bank manager. 

Anyone care to raise a Freedom of Information Act request to discover how much the Crown Estate has spend on advice over plans to float off a chunk of the £1.3bn Regent Street Estate? The bill from CBRE alone must be considerable, considering the agent has been giving wise counsel for at least 18 months.

In 2007 it probably felt like a good idea for an organisation forbidden from borrowing to raise maybe £500m. When news of the plans came out in early 2008 the Crown said it would help pay for the Quadrant development at the bottom of Regent Street - where work has now begun. 

The mill-wheels at the Crown grind slowly. The recession poured in grit rather than grist.There was also a fair bit of internal opposition. But insiders say the go-ahead for a Special Purpose Vehicle was to be announced on July 8^th at the Crown's summer reception at Lancaster House on July 8th. It did not happen.

The Crown admits in the FT this morning that the SPV idea has been shelved: but goes on to say "the board remains committed to exploring the opportunities... of raising capital to fund its  investment in Regent Street."  Still spending then?

But how much has been spent so far? Oh, a supplementary question: where is the £500m coming from to pay for the Quadrant project?  Will some family silver have to be sold - or is the programme now to be stretched?

Advantage West Midlands has surely signed its death knell. It turns out that the regional development agency blithely handed over £100 000 to St Modwen after the developer billed the Quango for the £100 000 it paid to an associate of the Phoenix Four to secure the 286-acre Rover site at Longbridge, Birmingham.

On the one hand, the news in the Birmingham Post supports the claim by St Modwen that there was nothing underhand about paying Brian Parker a £100 000 "introductory fee." On the other, it shows AWM up as being extraordinarily lax with taxpayer cash and fuels the impression that the West Midlands is a cosy club when it comes to property dealings.

This impression is not helped by the millions spent down the years at MIPIM, where AWM have squandered taxpayer's money, royally entertaining members of the West Midlands property fraternity on a beach in Cannes. 

Will AWM have the brass nerve to spend a single penny next March after suffering spending cuts earlier this year? Who knows? But what the hell, perhaps a last blow-out? For an incoming Conservative government will surely cull the Quango, which cost the taxpayer £279m in the year to March and spent £20m in wages on its 390 staff.

The most interesting story of the day is not in the papers, but on Bloomberg. EG's former finance editor Chris Bourke says RBS is going to announce the closure of the department that doled out cash to those investing in non-UK commercial property - and dispose of the £33 billion loan book. About £22b of these loans lie in Western Europe, much of the rest is in North America. 

The pull out will be conducted in as slow and seemly a manner as RBS can muster - they say. But this is a repetition of the line the bank is taking with its £58b UK commercial property loan book, which is staying open, even as the pages are starting to be ripped out. The line is: "We are in control. We are not panicking. There will be no rushed sales."

This response brings to mind that given by call-girl Mandy Rice-Davies during the Profumo affair trial, when she was told Lord Astor had denied having sex with her: "well, he would wouldn't he?"  

RBS and Lloyds, encumbered with that dreadful HBOS loan book authored by Peter Cummings, are forced sellers, like it or not.  The growing crowd of buyers now circling these loans can smell the blood.  But for the sake of keeping up appearances, nobody likes to say it too plainly. When you hear the phrase, "taking advantage of market conditions" in this context, it really means "let's see if we can screw the banks."

Gerald Parkes resurfaces this morning in the FT.  The former Lehman Brothers fund manager is to join up with Sir John Beckwith, the 62-year-old property investor who made a fortune by selling his property company, London & Edinburgh Trust, for £510m to a very silly Swedish insurance company just before the market crashed in 1990.

Parkes was not one of those who exited 25 Bank Street in Canary Wharf this time last year clutching his personal possessions in a cardboard box. The European real estate funds business remained solvent with $9.4bn of other people's money invested.  Parkes and his colleagues tried for an MBO. It did not work out for the Cambridge-educated fund manager, who is very clever, but prone to letting it show.

                                              25 Bank Street, Canary Wharf

His former colleagues at Lehman are presumably still trying to convince the administrators to let them have the business.  But Parkes exited in May, presumably to fix up a deal with Sir Peter, who's Aim-listed Alpha Fund announced on Friday that perhaps India was not such a wizard idea and that investing in the UK and Europe was now the thing.  

Parkes joined the US bank in 2004 after a short spell at Invesco, which bought out his own business in 2001. Our man will know the whereabouts of a great deal of distressed property from the five years he spent at Lehman Brothers. This could prove quite a profitable pairing.

Each September Knight Frank is kind enough to give the Sunday Times an early summary of its LLP accounts for the year to April. Each year the paper returns the favour by being kind to Knight Frank.

In a year when your profits collapse by two-thirds and the equity partners have to manage on £169,0000 rather than £780,000, it is particularly important to have a positive gloss applied.

The paper does not disappoint. The story is illustrated with a house sold to Robbie Williams and nosed with upbeat statements from senior partner Nick Thomlinson.  A closer look at the numbers that Knight Frank kindly sent to others on Sunday morning reveals that....well, considering the savagery of the downturn, KF has indeed done pretty well.

OK, turnover is down by 23% to £255m: and profits have plummeted from £60m to £20m. But net assets for the LLP stand at £58m. There is £28.5m in the bank, along with an unused overdraft of £30m.

There are two reasons why the Proprietary Partners had to manage on no more than a DTZ director.  First, 61 of them now share the "PP" pot, against 46 last year. And £10m of that pot has been held back for a rainy day.

It may now only be spitting. Thomlinson says: "in the four months to August we have continued to trade profitably across the group."  So it sounds like KF's LLP business model has helped them come through the slump in better shape that many of their listed rivals. This can only mean it is time to start stealing staff again.

A trawl through the Rover Group report released on Friday gives fine and depressing detail on the way the "Phoenix Four" dealt with the nearly 300 acres of land handed to them for £10 by BMW. It is not an edifying read.

Saturday's Telegraph reports on the £100,000 fee paid by St Modwen to an associate of the quartet led by John Towers. This deal was signed off by Chairman Anthony Glossop.  St Modwen says it "does not share the inspectors concerns regarding these payments."  

Well, it should. For a start, why bother: to ensure exclusivity? Who else would have been interested? Land Securities walked away.

Few others beside St Modwen can tackle redundant industrial sites on this scale. Paying someone closely linked to the seller a fee of £100,000 does not pass the Private Eye test of probity.

The Telegraph does not cover the chapter on the land sales.The 286 acres were transferred from Rover to a shell property company (with the same directors) using a director's valuation of £40m. A couple of years later the land was sold on to Advantage West Midlands and St Modwen for £59m. The car business was given back its £40m, 

But as the inspectors put it delicately, "the sum of £16.48m remained outstanding" after expenses when the car business went bust. "Had it (the car company) remained the owner of the land at the time of the sales it would have been entitled to the full proceeds from the sales as of right." Where is that money now ?

The news that Ezra Nahome has become chief executive of Lambert Smith Hampton will please many. The very bright head of investment has been at LSH for nine years. He first had to survive the uncaring regime of owner-engineer Atkins and the aborted management buyout by ex-Regus UK chief Chris Boulton in 2003.  

Nahome then took a stake in the £47m MBO headed by Mark Rigby (pictured, right), which completed at the top of the market in June 2007. The following 18 months cannot have been fun. At the end of 2008 Rigby left to pursue his real love - Wasps rugby club. In came the tough-minded Philip Lewis, one-time protégé of Sir John Ritblat and former chief executive of Colliers CRE.

Lewis, who presumably bought Rigby's stake for a bargain price, is stepping back into the client facing role of deputy chairman. There is one delicate matter he will face. His old firm Colliers is more than irritated at being pushed out of the EG Top Ten agents list by LSH.The list published last week uses the last published accounts of LSH - which happen to be for the year to March 2008; and the last published accounts of Colliers - which run to December 2008.

LSH turnover of £78m puts them at number eight. Colliers turnover of £74m puts them at number 11. Colliers is convinced that comparable accounts would show them back in the Premiership and LSH demoted to League Division One. LSH filed their March 2008 accounts in mid-December 2008. On that score Colliers will be able to see if they are right this December. 

If you can stand hearing about the Candy brothers, and can put up with the open-mouthed fawning of two Bloomberg reporters who tell their latest tale, click here. This new 3500-word article is designed to extinguish every last doubt that property developers Nick and Christian Candy are in any kind of trouble, despite a little local difficulty with a Mexican zillionaire Carlos Slim. He is suing the brothers company CPC for $20m over a loan made on a development site in California. "It's all tactical," says Nick Candy. "It's not hostile."

The brothers seem to have given the two Bloomberg journalists the full jet-ride and champagne treatment. "A black Maybach draws to a halt one morning in July, and two men step out onto the runway at London's Biggin Hill Airport. Nick and Christian Candy ascend the stairs to their private jet, remove their Berluti shoes..." 

Pass the sick bag. Bloomberg is supposed to be a hard news service, not the Daily Express features desk. For all that, the piece does contain some new titbits on the boy's early life. More interesting is the information buried towards the end of the story. It relates to documents shown by CPC's head of corporate finance Steven Smith to the reporters on a visit to Guernsey.

NB: these are "unaudited internal reports" and not audited external accounts. But they sound pretty much like the same sort of documents shown to the Sunday Times in April.  At the time the paper reported the pair was worth £450m.

Bloomberg say the reports show that on May 31st this year CPC had £168m in the bank. On top of this the boys had a further £68m in personal accounts. Then on top of this £236m pile of cash stand five homes Smith says are worth £324m. Nett debt was £138m. Take that from the assets and you get to £422m, not a million miles from the Sunday Times estimate.

OK boys; most of the world get's it: you are loaded. So why not dispel any last lingering doubts by publishing full audited accounts?  

 Good to see the former chief operating officer of Land Securities return from prolonged royal duties. The FT says today that Mark Collins is joining the Lloyds Banking Group to help with the restructuring of its loan book; presumably the appalling property loans acquired when Lloyds took over HBOS.

In 2006 Collins was persuaded by former LandSecs CEO Ian Henderson to set up a property fund called Tellesma, which would benefit charities backed by the Prince of Wales. What could go wrong?  There was royal patronage, plus the support of Fleming's private bank, plus Ian Henderson as chairman.

It all went wrong. The Prince wanted to back green-only developments. Tellesma spent so long finding anything suitable the market went from under them. Nobody would then put any money in, not even the usual suspects from the Middle East.

To prevent the embarrassment of the LLP fund being wound up by administrators, Flemings quietly paid off the debts.

The move by the former COO of LandSecs to Lloyds signals the final demise of an idea dreamed up by some very powerful property folk after a discreet dinner or two with HRH at Clarence House.  Not many will admit to their involvement now.

The widely-liked Collins now has a proper job: helping sort out the right royal mess left behind by Peter Cummings, head of property lending at HBOS.  Now, there was a man who found it very easy to invest in property.

 DTZ was rather hoping for a quiet annual general meeting next Thursday at 125, Old Broad Street, their City HQ.  But the Telegraph this morning reports that shareholder activist group PIRC is demanding the CEO Paul (or David as they prefer to call him) Idzik take a pay cut. As the property world knows the un-quiet American has already reduced his base salary from £400 000 to £300 000 a year.

The firm now feels like it is stabilising under Idzik's firm grip. There are even whispers of making a few big hires once outside talent is convinced DTZ is going up rather than under. Idzik will make it clear next week that the latter is the case.

PIRC can be safely ignored. More than half the stock is now in the hands of the French Mathy family who have taken so much pain, they are hardly likely complain further. What will be interesting is to see if long-time chairman Tim Melville Ross, who presided over the previous disastrous regime, announces his retirement at the AGM.

Meanwhile Idzik scarcely has to worry about his pay chit. In May he spent £1m buying DTZ shares at 27p. Yesterday they stood at 96p. The City can spot the signs of a man doing a good, if brutal, job in a basically sound firm that still employs some very good people. A pity PIRC can't see same.

Fancy a cheque for £100 000? Then buy a book called The New Rules of Wealth.

The author is Ben Benson (pictured right), a 34-year-old from Huddersfield who has sadly escaped the notice of the Estates Gazette Rich list, despite owning property he says is worth £60m.

Young Ben has printed a number in each of his books. He will pick 10 numbers and give £100, 000 to those holding books with matching numbers.  

The book itself contains interviews with rich folk. One who gives away the secret of his wealth is Leeds-based property developer Kevin Linfoot, who wealth was put at £80m in last year's EG Rich List.

Sadly Kevin is worth a little less today. Readers of EG will perhaps recall that his company KW Linfoot went into administration in February.

Like to know a little more about Ben Benson? Go to http://7lawsofwealth.com/ .His site will tell you a great deal more about how he makes money than the naïve puffery in the Telegraph today.

The Kraft bid for Cadbury will no doubt re-ignite speculation of property sector bids, with Hammerson being the favourite target. But not today.

Today the story that raises eyebrows high is the tale of building society leaders whining about the Financial Services Authority imposing tighter mortgage lending restrictions on them than on real banks.

Northern Rock remains in state hands. The fraud cases against the duped Cheshire and Chelsea building societies have not even reached court.

Yet building society leader Adrian Coles (pictured left) says: "the proposed changes would put us at a disadvantage to our banking rivals, especially when competing for business among first-time buyers."

You have to read it twice to believe he really does have the gall to think the world has forgotten the incompetence and greed shown by building societies during the boom matched that of real banks.

Has he already forgotten the very point of building societies is for them to be less greedy and incompetent than real banks?

It normally takes about 5-7 years for the painful lessons of a boom to fade from memory. There is now rising bid fever in the City. In the commercial property sector every man and his dog (yes, including the Koreans) are setting up funds.

The sheer relief that the deepest recession in living memory is passing seems to have triggered widespread symptoms of early onset Alzheimer's.

Friday's post, highlighting how banks might trade out rather than bale out of their distressed property holdings, concluded by asking if the next story is what this might mean the government Asset Protection Scheme (APS), due to be launched this month after many delays.

The Guardian has kindly obliged with a long article.The paper took a different angle, no doubt inspired by Matthew Oakeshott (pictured left), the Liberal Democrat Treasury spokesman, who is by far the most intelligent and quotable politician on commercial property matters.

The point made by Lord Oakeshott is that the APS will value assets dumped into the so-called bad bank at December 2008 prices.

As values have dropped by more than 10% since then, he says the assessment of who takes how much of the eventual hit (bank or government) will work in favour of the banks and so be "a fraud on the British taxpayer."

Oakeshott, says the assets should be valued on the day they are eventually transferred into the bad bank.

The man who is a director of fund manager OLIM, which has some properties of its own, is obviously correct.  

But, by December, (well, perhaps next summer) values may have recovered to those of last December, who knows?  So the argument loses a little weight.

The still-unwritten story is: how big will the APS turn out to be? The £575b monster envisaged at the nadir of the crash? Or something smaller now that banks like Lloyd's and RBS are making noises about surrendering far fewer assets into the APS.

One way to find out would be for the forensic-minded Liberal Treasury spokesman to ask the government if it is thinking of reducing the £25bn provision for APS losses made in the last budget. Lord Oakeshott?

The most interesting story to play out over the next 1-3 years is how RBS and Lloyds will extricate themselves from the £90b hole dug by over-enthusiastic property lending between 2004 and 2007. Do they mostly bale out or mostly trade out?

Both The Times and the FT produce good stories today that show this process is shifting decisively towards trade-out. This solution has of course been given impetus by the feeling that values will rise - and the fear that baling out will cause them to crash.

So there will probably be as much property banking activity between now and 2012 as there was between 2004 and 2007 - just of a very different kind.

But what does all this mean for the much delayed "bad-bank" that the government is supposed to be setting up? The idea is (or was) for the banks to offload their distressed loans and property to the state. Is it now needed? That is the next story.

Today's Evening Standard column contains the tale of Sir Stuart Lipton's attempts to rescue the Commonwealth Institute (pictured right) in Kensington High Street by bringing in the Design Museum and giving them a £20m dowry to convert the listed hall: all paid for by building 62 very, very posh flats in the garden.

This is the first viable scheme produced in 20 years to rescue the Commonwealth Institute. There is a credible developer, a world class architect and a workable plan to reuse a hall that finally closed in 2004.

And the reaction to the scheme that goes before Kensington & Chelsea planning committee in a couple of weeks? Almost as if Barratt had applied to build 262 flats and turn the hall into an antique market. During a walk around the site last month Sir Stuart did well to hide his frustration.

 Apologies for returning to the terms of the Watermark Place deal. But the FT does again this morning. Again, it seems to have it a bit wrong, persisting in the view that Nomura is getting six years rent free for the 525 000 sq ft building on Upper Thames Street in the City of London.

As this is the biggest-ever letting of already build spec office space in the City, it is worth trying to clarify the terms. So, after a chat with both Mark Lethbridge of Drivers Jonas, who acted for Nomura, and Chris Vydra of Knight Frank, who acted for Oxford Properties, this is what appears to have been agreed.

In theory Nomura is getting five years and nine months free. In practice Oxford has granted a 4-year rent free period from when Nomura move in late next year. This agreement forgoes rent of £21m a year at a theoretical average of £40.50 - an £84m sweetener. The bad space has a theoretical rent of under £40 and the good space £45.

These figures provide the base rents for the first review of the 20 year lease in 2015.  Then Nomura will be paying no more than £50 for the best space for the next five years. The final 10 years of the lease are at open market rents. The other one year and nine months comes from turning costs into time of altering the building to suit Nomura. One year and nine months rent equals £36m.

One last point - promise: a generous 5% yield values the building at £420m. That is comfortably more than the cost of some $500m (£306m) Oxford admits so far to spending. But it would be interesting for some student of surveying to put the terms of this deal into an Internal Rate of Return (IRR) model.

Would a spreadsheet that simply measures cash in and the cash out over time come up with a profit for Oxford? Work started a couple of years ago. By 2015 they will have had cash out for more 8 years before a single penny comes in.

 Yesterday's report in the FT suggesting that Nomura had secured a rent free period of six years at the start of their 20-year lease of 525 000 sq ft at Watermark Place (below) in the City is a bit wide of the mark.

Today Mark Lethbridge of Drivers Jonas, who acted for Nomura, tells a slightly different tale.

The rent in years one to five is £40.50 sq ft; then £45 between year five and 10. Between 10 and 15 years, and between 15 and 20 years, it's up (or down) to the open market rent. Those extra 2 years are equivalent to the costs Canadian developers Oxford Properties have absorbed in fitting out and filling in the atrium - after which they will be able to charge rent on the additional space.

That is quite a cost to absorb - more than £40m on the £300m development bill. But Mark Lethbridge says Oxford (which is owned by a Canadian public service pension fund) is happy and relaxed and wants to do more in London. "They were really great people to deal with. There was none of the usual legal tensions". Is it because they are Canadian, not American? "Well, yes, perhaps."

City rents have reached a new low of £28 sq ft. That is the roughly what Nomura will end up paying over 20 years for the lease on the 525 000 sq ft Watermark Place on Upper Thames Street. That is because the Japanese bank has wrung a rent free period of almost 6 years from developers UBS and the Ontario Pension fund on a headline rent of just over £40 sq ft.

Mark Lethbridge of Drivers Jonas, who is acting for Nomura, has disclosed the terms of the City's biggest letting to the FT today ahead of an official announcement tomorrow, when the deal will be signed.

The implications are chilling. What terms will RREEF get if they can ever let their 400 000 clunker in Aldersgate that used to be the home of Clifford Chance?  What terms will struggling Minerva now accept on their nearly finished 400 000 sq ft block on Cannon Street?  Or indeed their one-third let St Botolph's block, which is about the same size as Watermark Place.

But never mind that. First imagine the effect on all those big deals and major developments that will now have to include a worst-case scenario of six years rent free instead of three. Second imagine all those tenants with imminent lease breaks trying it on by quoting the £28 figure as the new benchmark level for City rents.