Table Of ContentThe Property Masters
The Property Masters
A HISTORY OF THE BRITISH COMMERCIAL
PROPERTY SECTOR
Peter Scott
Business History Unit
University of Portsmouth Business School
UK
@
Taylor & Francis
...." Taylor & Francis Group
LONDON AND NEW YORK
Published by Taylor & Francis
2 Park Square, Milton Park, Abingdon, Oxon, OXl4 4RN
270 Madison Ave, New York NY 10016
First edition 1996
Transferred to Digital Printing 2008
© 1996 Peter Scott
Typeset in Great Britain by Saxon Graphics Ud, Derby
ISBN 0 419 20950 6
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To my parents
Contents
Acknowledgements x
Glossary of abbreviations and technical terms xiii
List of tables xvii
List of figures XIX
Foreword Jack Rose xxi
Chapter 1 Introduction 1
1.1 The aims of this study 1
1.2 Scope, sources and methodology 4
References and notes 7
SECTION ONE THE EVOLUTION OF THE BRITISH
COMMERCIAL PROPERTY MARKET SINCE 1800 9
Chapter 2 The emergence of a commercial property investment
market 1800-1918 11
2.1 Introduction 11
2.2 'Traditional' landowners and the nineteenth century
urban property market 11
2.3 Insurance company investment in the property sector
1800-1870 14
2.4 The changing nature of the property investment market
1850-1914 18
2.5 City office development and the property market 21
2.6 Insurance companies and the property market 1870-1918 26
References and notes 34
Chapter 3 The growth of a national commercial property market,
1919-1939 38
3.1 Introduction 38
3.2 The growth of market intermediaries 39
3.3 The 'multiple revolution' and the property investment market 48
II'- ____________
viii C_O_N_T_E N T_S_ __________
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Appendix: The mathematical derivation of the steady state
of corporate growth equation 63
References and notes 64
Chapter 4 Property investment, development and the capital
market between the wars 68
4.1 The pattern of institutional property investment 1919-1939 68
4.2 Property companies and the property development market 73
4.3 Property development finance 83
4.4 Entrepreneurship in the inter-war property investment market 90
References and notes 95
Chapter 5 War and recovery 1939-1954 99
5.1 The Second World War 99
5.2 Property investment and the capital market 1945-1954 104
5.3 The financial institutions and the property entrepreneurs:
1945-1954 117
References and notes 128
Chapter 6 The property boom 1955-1964 132
6.1 Introduction 132
6.2 Property investment and the capital market 1955-1964 133
6.3 Institutional investors and the property developers 1955-1964 141
References and notes 162
Chapter 7 From Brown Ban to Barber Boom 1965-1973 166
7.1 Introduction 166
7.2 The property investment boom 166
7.3 The property development market 1965-1973 174
References and notes 187
Chapter 8 The property crash, aftermath and recovery 1974-1980 193
8.1 Introduction 193
8.2 The property crash 194
8.3 Recovery and boom, 1975-1980 201
Referen ces and notes 209
Chapter 9 The best of times and the worst of times - the commercial
property market since 1980 213
9.1 Introduction 213
9.2 The retreat ofthe institutional investors 1981-1984 213
9.3 The changing face of commercial property 215
9.4 The merchant developers 221
9.5 The Big Bang Boom 1985-1989 223
CONTENTS I I ix
9.6 The second property crash 229
9.7 The green shoots of recovery 236
References and notes 239
SECTION TWO A STATISTICAL ANALYSIS OF THE
COMMERCIAL PROPERTY MARKET 245
Chapter 10 A statistical overview of the property investment
market 247
10.1 Introduction 247
10.2 Net investment in property 1922-1993 247
10.3 The composition of institutional property portfolios
1870-1990 260
10.4 Initial yields on investment property 1920-1993 266
10.5 Market rents 271
10.6 The rate of return on investment property 1921-1993 274
References and notes 284
Chapter 11 An econometric analysis of property returns and the
volume of institutional property investment 286
11.1 The long-term determinants of rates of return and net
investment in UK property 286
11.2 The determinants of investment property capital values 291
11.3 The determinants of the volume of institutional property
investment 294
References and notes 296
CHAPTER 12 CONCLUSIONS 297
References and notes 306
Bibliography 308
Index 321
Acknowledgements
Conducting the research for this study would not have been possible without the
help of a number of institutional investors and other organizations which allowed
me access to their private business papers. I am particularly indebted to the
archival and investment staff of the Church Commissioners, Clerical Medical,
Legal & General, the National Provident Institution and Standard Life, whose
generous and patient assistance enabled me to assemble comprehensive case
studies of their property investment histories. A number of other organizations
have also provided me with access to their archives; I would particularly like to
thank Brixton Estate pIc, Colliers Erdman Lewis, Eagle Star, the Estates Gazette,
Healey & Baker, Hillier, Parker, Marks & Spencer pIc, Pearl Assurance and the
Prudential, plus several other institutions which let me check through their
archival papers, but had no surviving records covering the information I was
seeking.
My thanks are also due to a number of record offices which assisted me with
this project, particularly the Church of England Record Centre, the Guildhall
Library, the Public Record Office and the West Yorkshire Archive Service.
Stanley H. Burton gave me access to sections of the Montague Burton papers
which are not normally open to the public and provided me with a copy of an
additional unpublished paper, for which I would like to thank him. Richard
Barkham, John Dunbabin, John Lawrence, T.W. LaPier, Ralph Turvey, J.
Whitley, J.H. Treble and John Butt generously provided me with access to work
they had undertaken which was unpublished at the time of writing. I would also
like to thank Alison Sharpe for her help with my research on Legal & General,
and Stephanie Jones for help with my work on Hillier, Parker.
Archival evidence can only provide an incomplete picture of the past; my
research was greatly assisted by being able to conduct a number of interviews
with people who are, or have been, active in the property investment and/or
development markets. I am grateful to John Crickmay, Arthur Green, Michael
Hallett, Arthur Hemens, Bernard High, Paul Orchard-Lisle, David Ormerod and
Tony Overall, who granted me interviews. Particular thanks are due to Edward
Erdman, Jim Pegler and Jack Rose, who gave me access to their unpublished
memoirs and other written work, in addition to the interviews I conducted with
them, and to J. Max Keyworth for allowing me to quote from his privately
published history of the Covent Garden property companies.
--'I I
'--_________A _C_K_N_O_W_L_E_D_G_E_M_E_N_T__S ________ xi
I would like to give special thanks to the Investment Property Databank for
their help with some of the statistical aspects of my research, and to Allsop &
Co., DTZ Debenham Thorpe Research and Jones Lang Wootton for allowing
me to make use of their data. My thanks are also due to James Foreman-Peck,
Ken Mayhew, Sean Pascoe and Andrew Ryan for their advice regarding my
various attempts at econometric analysis of the property market, and to Paul
Gandy for his help with the mathematical derivation of the steady state of
corporate growth equation, outlined in Chapter 3.
The original idea of writing a history of the property investment market was
conceived in 1989 at the London School of Economics, and stemmed from an
MSc dissertation I undertook there in the Department of Economic History. My
thanks are due to Leslie Hannah, Paul Johnson and the Prudential Property
Research Team for their help with this earlier project. The first incarnation of
this study was assembled as a DPhil thesis in Modern History at the University
of Oxford, the research for which involved considerable travel to London and
elsewhere. I am grateful to the Economic and Social Research Council, the
trustees of the Michael Postan Award, and Merton and Pembroke Colleges,
Oxford, for their financial support with this research. I would also like to thank
Tom Elliott, Shan Mitra, Rupert Nabarro, Katie Peters, Andrew Ryan and
Richard Truscott for helping me to arrange accommodation in London during
my research, and my sister Ruth for helping me with accommodation in
Edinburgh.
My work on the recent history of the property market was further developed
after the completion of my thesis, while I was working as a part-time consultant
with London Economics. Particular thanks are due to John Kay, Nick Morris,
Bill Robinson, Ron Smith and Nick Stern for their help and advice during this
period. The long process of transforming my thesis into a book has largely been
undertaken during the last year; I wish to thank my colleagues in the Economics
Department, University of Portsmouth, for all their encouragement and support.
A number of people provided me with useful advice after reading through
sections of this study, the thesis from which it was developed and a number of
papers I produced in connection with this project; thanks are due to Richard
Barkham, Virginia Bainbridge, Sue Bowden, Francesca Carnevali, Christina
Fowler, Andrew Godley, Cliff Gulvin, Mark Hampton, Leslie Hannah, Carol
Heim, Katrina Honeyman, Lester Hunt, David Kells, Katie Peters, Chris Reid,
Tim Rooth, Pa ul Walker and Oliver Westall. I also wish to thank Nigel Wratten
for his help and advice with my research, and Kate Pattullo, whose help with
the intricacies of WordPerfect 5.1 and Excel saved me a great deal of time and
frustration.
Thanks are due to the following people and organizations for allowing me to
reproduce the photographs in this book: Jeremy Burton (Montague Burton and
Burton store); City of Coventry Central Library (Coventry precinct); Clerical
Medical (Sir Andrew Rowell); Greater London Library (Elephant and Castle
Centre); Guildhall Library (Fountain House); Healey & Baker (Aubrey
