Wichford Plc is held up by the Treasury as a fine example of a blue chip international company that defines all the best attributes of an operation choosing to successfully trade from an Isle of Man business base.
Established four years ago, Wichford recently transferred from AIM, the London Stock Exchange’s marketplace for small and growing companies, to full LSE listing – only the fourth company incorporated in the Island to successfully do so.
Its Chairman, Philippe de Nicolay, is currently a General Partner of Rothschild et Cie Banque, Paris. He took over the chair from well-known Island businessman, Michael Sheehan, following the company’s 2007 board meeting in the Isle of Man.
Wichford is a property investment company with a portfolio focused on properties occupied by central and state government bodies in the United Kingdom and Continental Europe. As at 31 March 2007, the company owned 67 properties throughout the UK, totalling 2.49 million square feet, currently worth £600 million. This represents a rental income in the region of £40 million per year.
The company’s rapid success rests on its choice of tenant: its focus on government occupiers provides a very low risk of default on rental payments combined with long-term stability as a result of low tenant turnover. Wichford’s core strategy therefore remains virtually unaffected by vagaries in the global economy – such as the turbulence in the sub-prime mortgage market – that might adversely affect the performance of more mainstream property operations.
The business is advised on an exclusive basis by Wichford Property Management, which is jointly owned by J. O. Hambro Capital Management and Laird Capital. WPM’s management team has considerable expertise in property and structured finance. The company also benefits from a property consultancy relationship with Brown Cooper Marples, a privately owned property investment adviser specialising in property acquisitions and sales. BCM is well known in the investment property market for sourcing and delivering substantial property transactions.
Dynamic environment
Wichford’s business was set up in 2003 as an Isle of Man based Limited Partnership, which quickly grew to own a portfolio of 17 properties valued at over £119 million. To allow for further growth, the limited partners agreed to exchange their investments for shares in Wichford Plc. In August 2004, the company floated on AIM and made a successful institutional placing of £30 million of new equity. In July 2005, the company raised a further £100 million, which released cash to purchase more properties. By September 2005, the company’s portfolio was independently valued at £267 million. A year later this figure had risen to £458 million.
At the beginning of 2007 shareholders agreed to expand the geographic area in which Wichford could invest to include Continental Europe, its first acquisition being the Justice Centre in the German town of Halle, near Leipzig, for a total of Euro57 million. The company went on to acquire a German office portfolio consisting of four properties in Berlin, Stuttgart, Cologne and Dresden for a total of Euro149.5 million. By the end of 2007, the total value of the company’s investment portfolio stood at £600 million.
The Isle of Man…by choice
The speed and effectiveness of professional services available to new businesses in the Isle of Man were the prime reasons for Wichford choosing to operate from the Island. Of the three British offshore islands close to the City of London, the Isle of Man stood out as being particularly convenient.
‘People here are very, very reactive and professional,’ says Philippe de Nicolay. ‘You are at the forefront of the line very quickly. We have been able to create a very nice company here to move on from AIM to the main stock exchange register. We have found some very professional people here to work with and things have been able to move along in a seamless way. When you are interested in creating something, it’s wonderful when things run so smoothly.’
Local expertise
He singles out his boardroom predecessor, Michael Sheehan, for being ‘a wonderful chairman’ over four successful years since the company was formed. Also Manx law firm Simcocks for ‘doing an excellent job’ in its preparations for Wichford being admitted to both AIM and now the London Stock Exchange’s main register.
‘Some very successful companies remain on AIM, but we felt we were ready as a company to go for a main listing. It’s not a case of watching the performance of the stock market; we don’t run the company because of the stock market, but to the best of our ability - and hope investors will notice and the share price go up,’ he says with a very Gallic wave of the hand.
As one would expect from a member of a family with a long and distinguished background in international business and service to their country, Philippe de Nicolay’s business ethic is firmly rooted in intangible qualities such as commitment, trust and duty: ‘I am very proud to be a member of the Rothschild family,’ he says. ‘It’s not a matter of privilege – rather it’s having an inbuilt sense of duty to others, that we will never let our clients down.
‘We have built a unique portfolio of government rented offices now worth more than £600 million. This was the object from day one, and now that we have branched out 15 to 20 per cent of our portfolio to the Continent, acquiring properties in France, Germany and Holland – still sticking with government tenants only – we feel the time is right to make the move to full LSE listing.
Professional endorsement
‘It is a fact that there is a bit of a pull-back in the real estate market at the moment, but it will be able to grow again. Success means being on the right market that is adequate for you – some companies live all their lives on AIM and are equally happy. We also have been very successful there, but there is no one model for all. If you operate in a well-run environment, it is very possible to do just about anything. We will always be full of praise for the Isle of Man, as we have only found nice people and cooperation from the outset – in other words, we found the right service at the right price at the right time.
‘If an appropriate opportunity arose in the future and there was a choice, I would have no hesitation, based on this experience, in recommending establishing in the Isle of Man. I’m extremely impressed and satisfied with the level of service we’ve had here – as Napoleon’s mother used to say, and ‘pourvu que ca dure’ - long may it continue! http://www.wichford.co.uk/
Right place to live
Outgoing Chairman, Michael Sheehan, certainly has the experience to vouch for the Isle of Man as both home and business base. He first recognised its potential more than 20 years ago during a distinguished career in international business. He has been a director of public companies since 1964 and his current directorships include the board of J. S. Insurance (Sainsbury) and Scottish Power Insurance. A career banker, he was the inaugural Chairman of the Association of International Banks of Ireland.
He moved to the Island in 1985 just as its profile as a quality financial centre was taking shape. The Isle of Man’s tax ‘integrity’ was a major attraction, but he also identified other unique qualities – such as the significance of its constitutional arrangements with the UK and proximity to the City of London: ‘To my mind, the Isle of Man is obviously very attractive for a company like Wichford to operate from,’ he says. ‘The expertise available here is absolutely first class – and, as for living here, all I can say is that I’ve never been so happy in all my life.’
How the Island benefits
Assets worth billions of pounds held by Isle of Man companies are now invested in and through the City of London. The Island is also the leading offshore jurisdiction for non-UK companies joining AIM. This ‘inter-connectedness’ of quality commercial activities greatly benefits the Manx economy and its positive contribution to the City has been praised by Lord Mayor David Lewis, an eminent City lawyer: ‘The Isle of Man and the City boosts each other’s competitive edge in a way which is unmatched by other financial centres, given our mutual history, geographical proximity and business culture. The real shared strength is in our common understanding of/and approach to business.’
He also refers to the Island’s ‘powerful distinctive brand’ within the global financial arena and pays tribute to the Island’s high standards of financial regulation and policy of international cooperation, as well as its success as a financial services centre.
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