Interview with Nick Leslau

In his stylish Cavendish Square office self–confessed ‘deal junkie’ Nick Leslau shared with Susan Freeman some of the pivotal moments in his property career to date.

We are fortunate that Nick Leslau described as ‘one of the savviest investors around’ decided to switch his degree from German to estate management since we may otherwise have been deprived of one of our most innovative and prolific property dealmakers. Always financially ambitious, which he puts down to insecurities, his career took off in 1982 with an introduction to Sam Rosen, founder of Burford, a small ground rent business. They began buying commercial property and at just 25 he was joint MD. In 1987 they floated and shortly afterwards Nigel Wray reversed his assets into the company. With immaculate timing they liquidated their portfolio in 1988/9 and were well positioned for the ensuing recession. At the time the sale seemed premature but just a few months later they were heralded as geniuses. This explains the self-deprecating quote attributed to Leslau: ‘I made money by selling too soon!’ Over the next 10 years Leslau and Wray built Burford into a £1 billion business but for Leslau, a self–confessed ‘deal junkie,’ big was not necessarily beautiful and hankering after new challenges he left in 1997 to start Prestbury. Leslau is clear that his best career decision was joining Burford and so starting his 20 year partnership with dealmaker Nigel Wray who he credits with making him see property ‘in an earnings rather than assets way.’ He also greatly values his close relationship with agent extraordinaire Franco Sidoli who is ‘like a brother.’ In fact, Leslau immediately spotted the potential when Franco started his agency, offering £300k for a third of the business and they came close to a deal. Although a more recent acquaintance, entrepreneur Tom Hunter has also been ‘a hugely relevant relationship.’

There has been the occasional low point. Leslau still regrets signing up Japanese virtual reality entertainment group Sega World as Trocadero anchor tenant. Expectations were so high but it attracted few visitors. Although Burford made money on the property, for Leslau personally ‘it was still a horrible moment since it was very public.’

Leslau remains, as he puts it, ‘mega ambitious’ – in fact ‘strangely more so than 10 years ago.’ He suggests his grey hair has imbued him with a sense of balance, making him more focused. He admits to having previously been scattergun in his approach, citing the Ian Shrager hotel joint venture, and acquiring the rights to Noddy as examples of what he laughingly refers to as his phase of ‘diworsification.’ Leslau is certainly fearless – memorably the only hot-blooded male delegate at a BPF conference some years ago prepared to take up the challenge to accompany me to the legendary nightclub, Revenge, the gay cathedral of Brighton!

Today, as we weather another downturn, Prestbury’s sale of its regular property stock some 18 months ago, was once again seen as premature but now seems eminently sensible. Leslau claims: ‘a lot is luck but there were some tell tale signs. Why would you be offered a 100% mortgage or 100% loan to value? It just doesn’t make sense!’ But the groundbreaking deals continue.

A recent synthetic derivatives transaction with Swiss Re bought him exposure to thousands of equity release units with an average tenant age of 82. In effect, this is a £234 million bet that will pay off if UK house prices rise in value over the next 10 years. With our limited housing supply weighed against a requirement for new homes and with local authorities inflating costs by competing with each other to be ‘greenest’ Leslau reckons this is a good deal.

With three sons aged 10, 16 and 20, time out is divided between family and Saracens rugby club in which he has an interest. Leslau acknowledges that unless they have access to funding, property is tricky for youngsters to get into today. And of course property has become much more empirical and less (as he puts it) ‘fag packet’ and Leslau exclaims, ‘I like fag packet!’ For him property is the culmination of a series of intuitions. He looks at a building and decides if he likes it and whether it has a long-term future. He admits he still does the ‘fag packet’ and his team do the detailed analysis.

Today Leslau believes ‘we may be sitting on a knife edge.’ He counsels that now is the time to be level headed and the banks in particular mustn’t lose their nerve. But, with the amount of available equity that needs to find a home, he’s certainly not throwing himself off Beachy Head, commercially speaking.

Susan Freeman
susan.freeman@mishcon.com

Property Matters! 04