Francis Salway will step down as Land Securities Group Plc’s chief executive officer on March 31 and will be replaced by Robert Noel.
Salway, 54, has been chief executive of the U.K.’s largest real estate investment trust by market value since 2004. Noel, the 47-year-old managing director of Land Securities’ London properties, joined in January 2010 from Great Portland Estates Plc, where he had been property director since 2002.
Noel, who will earn an annual salary of 680,000 pounds ($1.06 million), said one of his goals is a “little more pace from top to bottom with everybody firing on all cylinders.” Over the next two years the London-based company won’t change its focus on keeping buildings leased and on developing new properties, Noel said on a conference call. He wouldn’t comment on whether he planned any changes to the management structure.
Land Securities, which has a London portfolio and a collection of shopping malls outside the capital, today said vacancies at it properties fell to 3.1 percent in the fourth quarter after attracting tenants including CBRE Global Investors. The company has been the second best-performing U.K. REIT since Nov. 10, when it said the value of its properties gained including the office tower nicknamed the Walkie Talkie in the City of London.
“It is a bit earlier than expected, as we thought Robert Noel would have to prove himself first by delivering on the development pipeline,” Harm Meijer, a JPMorgan Chase & Co. analyst, said in a note to investors.
Salway said today in the conference call that Land Securities is seeking to acquire distressed assets in Britain from the banks and larger assets that were securitized using the bond markets.
Land Securities shelved plans to divide itself in three in November 2008, citing “unprecedented” instability in the financial markets. It sold Trillium, the third part of the business, for 444 million pounds in January 2009 to Telereal.
“This appointment might again raise the debate about the company splitting,” Oriel Securities said in a note to investors. “That is unlikely near term.”
Noel led the London team in starting several major developments, such as the Walkie Talkie tower at 20 Fenchurch Street. Land Securities sold stakes in the developments before completion to reduce risk. Noel said construction costs on such projects are coming in below expectations.
“They’ve come down over the last quarter, we are taking advantage of those construction costs as we build, particularly at 20 Fenchurch Street,” he said. “It is a material advantage.”
Salway said he’s seeking “one more challenge” and has “nothing specific planned.” The company had been aware of Salway’s plans to leave since late 2010, he said.