• Friday, July 12, 2024
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BusinessDay

Beyond country houses

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When 33-year-old Jeremy Helsby returned to London in 1988, it was not a  happy occasion. He had been sent out to Washington DC just three years  earlier by his employer, the upmarket British estate agent Savills, to help launch the business in the US market. Things went well, and he and  his wife Nicola decided to settle there permanently.

Then the financial markets crashed. The US business was shut down and  the couple arrived back in London with no house, no job and a newborn  baby in tow. “They were personally dark days,” Mr Helsby says today.

Savills found him a position in its City office, leasing space to commercial tenants, but it was a far cry from the early days he had  loved as an agricultural investment agent, buying and selling farmland.

Although his career at the time seemed to have tanked, it was his first  step towards the company leadership. A Savills man for nearly 35 years,  Mr Helsby became chief executive in 2008.

“It said to the partners, here’s a young guy who’s prepared to get out  of his comfort zone and go and do something different,” he says. “You  could say I got it wrong because I had to come back here and start  again, but I had tried my best. If you want to get on in life, you have  to take a risk.”

Since taking the helm, his boldest move has been to revisit that early  US failure. Savills bought New York-based tenant advisory firm Studley  in May for £154m, its biggest-ever acquisition. The move takes the  London-headquartered company — which floated in 1988 — on to the home  turf of larger rivals such as CBRE and JLL.

Jeremy-Helsby
Jeremy Helsby

 

It is Savills’ second major foreign expansion after it stepped into the  Asian markets in 2000, buying FPD for £35m. “At the time that was a huge  bet, Asia was crashing and burning, and a lot of people said we were  absolutely mad. But it’s the best investment we’ve ever made,” Mr Helsby  says.

Savills Asia’s turnover was £354m in 2013, more than a third of the  group total. It generated underlying pre-tax profit of £36m, of a group  total of £75m. The UK now makes up just 51 per cent of Savills’  turnover, with the balance coming from Europe and the US.

Although still smaller than the biggest US-based property advisers,  Savills has outpaced its privately owned UK counterparts. It now employs  27,000 around the world, and total turnover is set to top £1bn this year  for the first time.

Unlike some of its bigger international competitors, Savills prefers to  hire and acquire local expertise rather than rotating top managers  around the world. Local knowledge is a vital asset, Mr Helsby argues.

The man on the street is still most likely to recognise the company as a  purveyor of country houses and estates to Downton Abbey types — a job it  has done for 155 years — but 85 per cent of turnover now comes from  commercial property work. This is becoming more prominent; Savills  worked on the sale of the Gherkin, the City of London’s most distinctive  office tower, in November.

“The tweeds and the black Labrador image was great 35 years ago, but the  world is a very different place now,” Mr Helsby says. However, the  longstanding residential business is still vital, bringing in private  clients wanting to expand their property portfolios.

“The investor today, particularly Asian investors who are one of the  biggest pools of assets, see property as one asset class — not  separately residential, commercial and land,” Mr Helsby says. “They want  an adviser who can talk to them about land, a nice house in Belgravia  and the Gherkin.”

He characterises Savills’ approach as “being a one-stop shop for the  global investor”. It is a lucrative business, but deals income is very  vulnerable when the property cycle hits a downturn — something many  agents and advisers discovered at about the time Mr Helsby became chief  executive, when the financial crisis was beginning to bite.

He accepted the job with some misgivings — property agents tend not to  respect “corporate crap”, he says: “This business has always been wary  of managers and loves fee earners.”
Part of the attraction was the possibility that, in the teeth of a  property market crash, being the boss could be a “poisoned chalice”, he  says. “That’s what being a chief executive is about — winning the  respect of the troops and steering the ship when life is tough.”

Sure enough, he had to make redundancies and Savills issued two profit  warnings in his first year. Explaining that to investors “was not a fun  experience”, he says drily.

Today, with the market back in boom times, has the property industry  learnt anything? Mr Helsby is quick to emphasise that less than half of  Savills’ income comes from deal fees; the rest comes from longer-term  contracts such as consultancy and building management.

Not that Savills is expecting a downturn. Mr Helsby is “very, very  bullish” about the market, particularly in London. “What money I’ve got,  I’d put it in London,” he says, making a great performance of the estate  agent’s art of selling.

It is almost convincing — but with London house prices 38 per cent above  their previous peak in early 2008, and prime offices in the West End and  the City back near record-low yields, this optimism may be in defiance  of gravity.

Born and raised on the Wirral in northwest England, Mr Helsby has no  family background or connections in land or property; his parents were  doctors. He decided to try land agency on a schoolteacher’s  recommendation.

His time at the Royal Agricultural College was “the best three years of  my life” and it was a natural step to find employment in land trading.

The countryside is still where his heart lies, although he spends much  of his time away from the family home, which is a farmhouse and “a few  acres” in Dorset.

As the firm’s chief executive, Mr Helsby has a punishing travel  schedule, spending a third of his time on the road gladhanding staff and  clients.

“As an adviser, we don’t own anything, the assets in this business are  people,” he says. “The troops want to see me. I’m good at making them  feel loved, which is absolutely crucial. Property agents are high  maintenance at times, the clients demand a high level of service and  it’s important they get that from people who are happy. People like it  that you’ve bothered to come and say hello and thank you.”

He sees his job — and that of his employees — as being about listening.  “People have got to like you, if they don’t they’re not going to use  you. So if you’re some arrogant little person . . . just shut up for a  minute. Listen to the client tell you what they want you to do, and  don’t always bang on about what you want to do.”

His personality has a flipside. Mr Helsby is a perfectionist with a  tendency to micromanage. His management style is assiduous charm with a  touch of the martinet, according to some who have observed his career  progress.

“If I ring a department and the phone doesn’t get answered quickly, I  get very irritated,” he says. “If I meet someone at a party and we’re  selling their house and they say we don’t return their phone calls, I  get extremely irritated. I have high standards and I expect other people  to have high standards.”

He admits that he uses events such as staff Christmas parties as a way  of discovering grievances, which he can then follow up. “People coming  to Savills expect a five-star service, right from the receptionist up,  and yes I will meddle and poke my nose in.”

Second opinion: The landlord
Toby Courtauld is not just a longstanding business contact of Mr  Helsby’s; he is also his landlord. Mr Courtauld is the chief executive  of Great Portland Estates, which built and owns Savills’ global  headquarters in the West End of London.

“Jeremy is well-respected, very driven and very direct, which I think is  a good characteristic,” he says. “The negotiations [over Savills’  tenancy] were better for that. He is very conscious of Savills’  strengths and weaknesses, and has played to its strengths very well in  the last few years.”

Culled from FT