MY INTERVIEWEE is twenty minutes late when he arrives for our meeting at Helical Bar’s headquarters, tucked away in a quiet street off Mayfair’s Berkeley square.
Mike Slade, a tall 67-year-old sweeps in, all apologies (“Darling, I am sorry, terrible traffic”) and explains he will have to leave in half an hour to drive up to Reading where he has promised to take his disabled brother John and his 53 classmates on a boating trip.
Sitting down in a casual white shirt, his arms splayed out across the chair next to me, all smiles, Slade is hard not to like. One of the grandees of the property industry, Slade’s relaxed air comes from spending more than forty years in the property sector and nearly thirty running Helical Bar, the FTSE 250 investment and development firm.
He has seen more property cycles than he cares to remember and now, after five turbulent years recuperating from the collapse of the last cycle, Slade says “little Helical is back roaring again”.
Last month the company booked £62m of profits from the sale of 200 Aldersgate in the City to Ashby Capital, and Brickfields in White City to Imperial College.
The sale of the 10-acre site, which was formerly used as a milk bottling plant for Dairy Crest, marked one of Helical’s most significant deals to date, Slade said.
“When you run a small company, big deals make a huge impact. I remember Johnnie Ritblat saying to me, I envy you being a lot smaller than [his then] British Land – I have to do a half a billion deal in order to get excited. Whereas if I do a £100m deal that is huge for us,” he said.
Helical – which has a £342m market capitalisation – is kept deliberately small to allow it to exploit the numerous property cycles and deliver strong returns.
“In 2002 to 2003 we gave back £250m to shareholders as we found the market even then getting a bit too hot for us, and it was great to be able to do that,” Slade said.
But the market was about to get even hotter and in 2006 Slade, sensing trouble ahead decided to get out – albeit a year too early.
“What we tried to do after the crash was to completely streamline the business and get back to an income situation before we started developing again. So the first thing we did was buy high-yielding secondary retail assets. Not your shiny shopping centres but your day-to-day working life destinations.”
While other institutions steered clear of regional assets, Helical plunged straight in, snapping up Clydebank shopping centre in Glasgow for £69m in 2009 – its first major deal following the credit crisis.
“When we made the acquisition, everybody said: ‘Are you mad? Why are you buying these sort of things?’ But now we find ourselves in the situation where everyone who said we were mad is now trying to buy these things from us.
“It sounds bombastic but it brings a smile to my face, because when everybody thinks it is dangerous to buy into a certain sector, that is of course when you should buy things, as long as you do your homework.”
Slade cites private equity firm Blackstone as an example of “brilliant timing”, snapping up half of Broadgate from British Land in 2009 for £1.07bn including debt. It is said to have sold the stake to a sovereign wealth fund this summer for more than £1.7bn – a massive uplift on its initial equity investment of £77m.
“When we people think that the sector is down, that’s when you find value and that is what a good investor does,” he said.
With income coming in from its regional assets, Helical then started buying into London, focusing on what Slade calls the villages such as Camden, Hammersmith and Shepherd’s Bush, as well as the City.
The group will shortly embark on the redevelopment of St Barts Hospital – one of the City’s largest regeneration schemes in 20 years – and will also kick-start the development of a 273,000 square foot office tower at 1 Mitre Square as soon as it secures a new funding partner.
Helical will soon have close to £1bn invested in City schemes, which Slade admits is aggressive for a company of its size.
“It is bold but at the same time that’s where we believe the most money can be made over the near future,” he said.
And shareholders are certainly backing Helical’s acquisition spree. It raised £80m earlier this summer through a retail bond that was oversubscribed.
The past year has seen numerous property firms tap the bond market for cash including St Modwen, Great Portland and Derwent London – a significant turnaround for a sector that recently was seen as too risky.
“Retail bonds are fascinating. If the banks are to a degree shackled now in terms of loans and if you can raise money from Joe Public by way of a retail bond I think that is quite an exciting new dimension for the business,” Slade said.
And Helical has not wasted any time snapping up assets since the bond sale, buying Maple House opposite Old Street’s Silicon Roundabout for £17.6m, where it is preparing to develop a vast three acre site with investment firm Crosstree Real Estate. The group is hoping to benefit from the migration of technology, media and telecoms firms to the north and east of London – from Whitechapel and Shoreditch to King’s Cross.
With the TMT sector now generating 35 per cent of office leasing deals in central London, is the trend here to stay and will the demand be there in 2015 when Helical’s scheme completes?
Slade concedes that it is a risky market, despite the area’s established links with tech firms that have made the Silicon Roundabout a global landmark.
“But that is the type of risk we take – are we right or are we wrong? – I will let you know in five years’ time.”
CV MIKE SLADE
Education: Attended Sherborne School and then studied at The College of Estate Management, London University
1960s: Slade’s first job after leaving college was as a trainee surveyor.
1972: At the age of 26 Slade formed a joint venture with Equity and Law Life and developed commercial buildings throughout Europe
1984: Slade reversed his small private property company into Helical Bar, a fully quoted group that made steel reinforcing for clients in the the construction industry.
1986: The steel reinforcement business was sold to its management and Helical moved to the property section of the stock exchange.
Sailing. His yacht, The Leopard 3, currently holds five world speed sailing records and five course records.