The crossover of retailers and landlords on each other’s boards can only be a good thing.
Understanding each others businesses is vital if the traditionally frosty landlord/retailer relationship is to continue to thaw. And one growing, but little noticed way, in which this has continued to develop is through the cross-pollination of each others boards.
The UK’s big property developers have for some time been eager to have the retail world represented on their boards. Hammerson has Home Retail chief executive Terry Duddy on its board, Land Securities has Sir Stuart Rose while British Land has both New Look chairman John Gildersleeve and Talk Talk boss Dido Harding (formerly of Sainsbury’s, Tesco and Kingfisher) as non-execs.
The benefits should be plain to see given that retailers are the main group of customers of each of the companies and their presence so should help the rest of the board understand their concerns and give them the tenant’s perspective on the market and a feeling for where retail is going. The property market lacks the immediacy of retailing, so the director from the retailer side should help the property company understand which way the wind is blowing.
Retailers have seemed less enthusiastic about having proeprty represented on their boards though, and very few retailers now have their property director on the board. So it was interesting to see that tast week Next appointed Land Securities chief executive Francis Salway to its board.
Next has always put property at the heart of its business and its property director John Varley is one of very those very few property directors who sits on a major retailer’s board.With Salway it gains the benefit of one of the most thoughtful minds in the property world and having just served as president of the British Property Federation, he has a good aerial view of the issues in landlord/tenant relationships.
With property being such a big cost to retailers and the the future of physical stores being such a major issue, having a crossover of directors has to be a good way of not just appointing non-execs who know what they’re talking about, but also getting real understanding of how the other side are thinking and feeling.