Andrew Shirley speaks to Irvine Sellar, Chairman, Sellar Property Group, and the man behind the Shard.
Irvine Sellar started his entrepreneurial career as a retailer in the 1960s, selling groovy threads to London’s bright young things. In the decades since, he’s scaled the heights of the UK property market, culminating in the Shard – at 310m, one of the tallest buildings in Europe. In its 12-year gestation, architect Renzo Piano’s jagged glass icicle has divided critics, defied the credit crunch, and put the redeveloped London Bridge Quarter firmly on the map.
The Wealth Report Your first business successes were in retail. How did you come to get involved in property development?
Irvine Sellar At our peak we were opening a store per month, so we were looking at property continually. Property development was part of running a retail group. When the brand was at its strongest I decided to sell, which might or might not have been the right decision, but there were bigger numbers in property development, and I find it more fun than the retail business.
TWR How do you see property as an investment compared with other classes of asset, such as equities?
IS Property is an attractive asset to hold provided it ticks the right boxes, such as location. It doesn’t matter whether it’s office, industrial or retail. It doesn’t have to be prime central London as long as it is well let on long leases to good tenants. It’s an asset you can feel and touch, although it has less flexibility than equities. It’s less risky than some other assets and gives you a feeling of wholeness; you feel that it is something you own. I’m a particular fan of geared property as it makes your equity work.
TWR Most of London’s towers are either mostly residential or mostly office. What made you pursue such a genuinely mixed- use high-rise project as the Shard?
IS We bought the original building as a pure investment. It was let to Pricewaterhouse- Coopers as their headquarters building for 90 years, with a rent review every 14 years. It was safe and boring, but great for the portfolio. After we’d bought it, a government White Paper emerged encouraging high- density development provided it was close to transport links – and of course the Shard was practically on top of London Bridge station. We wanted to maximise density, and multi- use spreads risk as there is less dependence on any one sector. We’ve managed to get more than 111,000 square metres on just 0.4 hectares, which I believe may be one of the highest densities in the world.
TWR Are there any other areas besides property development where you think you could be tempted to use your entrepreneurial skills in the future?
IS Historically, I’ve bought lots of companies and in the future I can see myself buying corporate businesses with a property flavour. I’ve always found it stimulating, particularly compared with the aggravation of property development. Each development is a business in its own right; you need a separate team to manage, run and complete each scheme. I have a £500m portfolio of pure investment property, but also have around 93,000 square metres of assets ready for development where planning permission has already been granted or an application is being worked up.
TWR Where do you see the biggest opportunities for the next generation of HNWI entrepreneurs? And will it be more difficult to create wealth in the future?
IS The world’s population is increasing and communication is improving rapidly, so in theory business success should become easier. Now, new products can potentially reach millions of customers within minutes via the internet. Money will also be made by feeding people. Our growing – and ageing – population has to eat and drink, and innovations in farming will create opportunities for some entrepreneurs to make a fortune.
TWR How has London changed since you started doing business?
IS London was very insular. It was grey and dirty. It wasn’t global in the way it is now. Throughout the 1960s, it became more exciting as fashion and music brought more colour to the place. Gradually England, and particularly London, turned into an attractive place to do business.
TWR Given the growing competition from the East, what do you think London has to do to remain one of the world’s leading cities?
IS First, we are lucky to be in the right time zone. Second, English is the most widely spoken language on the planet. We need to encourage the kind of immigration that will add value and we need to encourage dynamism. We also need the right political climate to stimulate employment, wealth and growth. Don’t hit the growth-makers!
TWR How important do you think it is for HNWIs to get involved in philanthropy?
IS It is important, but you have to be choosy. Often, philanthropy is used as a way to look good and not pay tax. I also worry about the skimming that takes place before the money reaches its destination. If someone needs something and I can help, I’ll help them directly. For me, philanthropy is about doing good directly, not talking about it.
TWR Do you have any favourite investments of passion, such as art?
IS I should, but I don’t. Art must be a pleasure to invest in and generally it has performed better than some other areas. But you need time to do it and I haven’t got time.
TWR What is the most important business lesson you have learned during your career?
IS Never be complacent. Just when you think you are at the top, you need to watch out for the rustling in the bushes.