John Whittaker runs Peel Group, a huge British conglomerate with property, media, and infrastructure assets of inestimable worth. The self-made billionaire who got famous for helping to develop some of the UK’s buildings, Whittaker lives on the Isle of Man these days. This report is meant to help all those in business, who figure the coronavirus pandemic has ruined them alone. It turns out, even billionaire property giants are hard-put to overcome this crisis. Here’s a lesson in sticktoitiveness.
The fortune of this Prior Park College graduate, was primarily tied to a bit of luck when Peel Group developed and profited from Trafford Centre, and to the doggedness of the reclusive businessman, of course. Whittaker now has stakes in such brands as Pinewood Studios Group, MediaCityUK, and other ventures, but he’s a property mogul at heart. Unfortunately, the news Peel was liquidating stakes in Peel Ports and Liverpool airport to cover Whittaker’s bets on Intu Properties, reveal the nature of UK property game today. And the COVID mess has amplified an already difficult situation.
Intu Properties, for those unfamiliar, is a British REIT focused on shopping center management and development, a sector hit pretty hard even before the coronavirus pandemic but the brakes on the whole social gathering idea. Peel Group’s stake in the fund became almost worthless even before COVID-19, and there was £4.5 billion in crippling debt before the current crisis. To make matters worse, Intu has properties in the UK and Spain, which is like saying they own malls in the first and second levels of hell for 2020 profits. But Whittaker is widely regarded as a very astute, very clever businessman, and he’s no stranger to the ups and downs of the business.
On the “up” side, John Whittaker managed to convince the BBC to turn down three other sites across Manchester, in order to move into Peel Group’s MediaCityUK in Salford Quays. And even though he’s been forced to slim down his empire to rake in cash to prop up his core businesses. Those unfamiliar with the billionaire speculator might underestimate him. But, behind the scenes is where Whittaker excels at business.
This Guardian story, while it’s critical of Whittaker, reveals the businessman’s skill with public political debate, and the inner workings intermediary bodies and corporate coalitions do. Sure, Intu Properties is a money pit, at the moment, but don’t bet against winners. Whittaker is a lot more powerful and influential than the news tells.
According to The Guardian, a 2013 report by Liverpool-based thinktank Ex Urbe found that Peel Group owned or controlled more than 300 companies in the UK. However, Whittaker’s influence and power to make the deal is not limited to controlling assets. Take, for instance, the May 1 Intu appointed of former PwC and EY restructuring officer David Hargrave as a restructuring lead and non-executive director of the faltering company.
I’ve no doubt Hargrave and Whittaker are behind this week’s negotiations to get standstill agreements to pause repayments of debt on account of the pandemic. My point being, Whittaker is a bulldog. Everything he’s doing reminds me of a pit bull unwilling to let go to defeat. Which is why I said, “never bet against winners.” Even if the billionaire’s stake in Intu Properties ends up in the tank, the salvage operation at Peel Group will turn up something positive.
Property owners like Whittaker, British Land, and Hammerson have taken a massive hit because of COVID-19 because thousands of tenants have closed stores or were unable to pay their rents. And while imminent financial collapse is a nagging possibility in these uncertain times, the lesson the Whittakers of the world can teach us is to keep fighting. Keep thinking up big ideas, even while big problems nag at the fabric of existence.
Take Peel Group’s plans to recreate an old exhibition space near Trafford Centre, into a first-ever spa experience for UK patrons. The project to be developed with the Therme Group showed brilliant potential before the current crisis, and could again with the right tweaks. After all, what would wellness enthusiasts pay for a certified safe pampering session after COVID?
My thinking is that Whittaker and others will be thinking on how to innovate out of the crisis. I am also thinking we need to be rooting for the UK billionaires since their failure will certainly mean a really bad “new normal” for most of the rest of us. My money’s on any guy who can lose $350 million dollars in one day and keeps on smiling (breathing).