Francis Salway departure would be retail’s loss

It can’t be nice having the papers delivered on a Sunday morning and seeing you might be out of a job. But that’s what happened to Land Securities chief executive Francis Salway last week, when The Sunday Times said he was being given an ultimatum to come up with a radical plan to turn around the UK’s biggest property company or be thrown out.

On the surface this is a property story rather than a retail story. But actually for Salway to go would be a massive setback to all the work which has gone on to improve relationships between landlords and retailers.

I was talking to one very senior retailer about this over lunch last week. He said that while Salway’s demeanour – which he very accurately described as being like that of a country vicar - was rather at odds with that of most of the retailers he has been negotiating with, he has been the driving force behind the real change which has been achieved in the past year.

The retailer went on to say that alongside Prudential and British Land, Land Securities had been the most progressive landlord on issues such as monthly rents and service charges, while other big names in the property sector, such as Hammerson and Westfield, had been much more reluctant to give ground.

What he’s done at Land Securities is to turn it into a company which treats tenants like customers, a radical move in the stuffy world of commercial property. The company is almost obsessive about getting into the mindset of its retail tenants, as the composition of its board shows, with a third of its non-executives - Marks & Spencer executive chairman Sir Stuart Rose and Kingfisher finance director Kevin O’Byrne – being retailers.

His tenure as president of landlords trade body the British Property Federation was also highly positive and conciliatory, when he dealt positively with the challenge of the “Three Phils” campaign on abolishing quarterly in advance rent payments.

From an investor’s point of view, it’s not hard to see why there is anger at Salway. A lot of time and effort was spent on a demerger which was then canned, and Land Securities lost the trifling sum of £4.8bn last year. The company has taken a battering in a property sector which is if anything even more stricken than the retail world.

But this thoughtful man has been the biggest ally retailers have had in the property industry in recent memory. It would be a huge loss to retail as well as Land Securities were he to go.