28 years of Liberty International

Liberty International began life in the UK in 1980 as the fledgling international arm of Liberty Life Association of Africa Limited, the South African financial services company founded by Donald Gordon in 1958, but its oldest component part is Capital & Counties, incorporated in the UK in 1933.

Now an independent FTSE 100 property company, listed in London and Johannesburg, the company’s progress each year from 1980 is recorded below by a brief synopsis.

1980

• Garsan Limited is formed on 24 June 1980, Donald Gordon’s 50th birthday, with an initial share capital of £10,000.
• Funded entirely by UK bank borrowings, a £20 million investment is made to acquire 14 per cent of Sun Life, a UK listed life insurer.

1981

• Garsan changes its name to TransAtlantic Insurance Holdings Limited. The Sun Life interest is increased to 21 per cent, funded by bank borrowings now increased to £30 million.

1982

• A 29 per cent interest is acquired in Capital & Counties by way of a share issue while the Sun Life interest is increased to 24 per cent and now shows a revaluation surplus of £23 million on a £37 million investment.
• Shareholders’ funds jump to £78 million – the platform has been rapidly established.

1983

• Further capital of £32 million is raised by the issue of 21.5 million shares at 150p per share. Lincoln National, a life insurer from Fort Wayne, Indiana, USA, briefly appears on the scene as a 25 per cent shareholder.
• Shareholders’ funds jump again to £145 million and a maiden dividend of 2.8p per share is declared.

1984

• Lincoln National departs from the scene as Liberty Life acquires their interest, restoring its shareholding to 75 per cent.
• Further strong capital appreciation, particularly from the 25 per cent Sun Life interest, increases shareholders’ funds to £184 million.

1985

• From investor to operator – TransAtlantic makes a public offer and acquires a controlling stake in Capital & Counties which remains a listed company.
• Total assets more than double to £461 million while total shareholders’ funds including minority interests increase by 79 per cent to £331 million.

1986

• Profit before taxation more than doubles to £24.4 million and, after further capital raising, shareholders’ funds increase to £519 million.
• Relations with Sun Life plummet as TransAtlantic votes down a Sun Life shareholders’ resolution.

1987

• TransAtlantic lists on the Luxembourg Stock Exchange as London refuses a listing because Capital & Counties is also listed.
• The overall group’s shareholders’ funds reach £751 million following a major capital raising exercise by Capital & Counties to finance its development programme.

1988

• The Lakeside, Thurrock, site is acquired for £64 million and construction starts.
• The Sun Life impasse breaks as an attempted Sun Life alliance with a French group, UAP, is decisively rejected by shareholders and two TransAtlantic representatives join the Sun Life Board.

1989

• UK base rates jump from 7.5 per cent in 1988 to 15 per cent in 1989.
• An accord is signed with UAP which had acquired by way of on-market purchases a 25 per cent interest in Sun Life approaching TransAtlantic’s 29 per cent.
• The value of the Sun Life investment jumps from £151 million to £221 million while the property revaluations are more modest.

1990

• Notwithstanding the prevailing gloom in the property market, the opening on 25 October of Lakeside, Thurrock, the group’s flagship centre, is a spectacular event. At £353 million, Lakeside represents around a third of overall property assets – the group remains determined to keep 100 per cent ownership.

1991

• Life insurance activities move centre stage as TransAtlantic contributes its 29 per cent Sun Life interest and a further £180 million in cash to Rockleigh Corporation, a joint venture with UAP, which successfully offers and takes 100 per cent ownership of Sun Life.
• The property market is still dire and net asset value per share falls 18 per cent.

1992

• Full merger with Capital & Counties finally enables TransAtlantic to obtain a listing on the London Stock Exchange.
• The shares begin to rally strongly from a low of 162p as the property market shows signs of recovery, although net asset value per share still drops 12 per cent to 274p.

1993

• After three years of decline, TransAtlantic’s UK property valuations stop falling and instead show a surplus of 7.6 per cent while Sun Life has an outstanding year growing new business volumes strongly and increasing its long-term business funds from £10.9 billion to £15.3 billion.
• The share price increases 49 per cent over the year to 355p.

1994

• TransAtlantic splits its property activities into two parts with Capital Shopping Centres (CSC) created as a specialist shopping centre business.
• The initial public offering of CSC on the London Stock Exchange raises £216 million reducing TransAtlantic’s interest to just below 75 per cent.
• The head lease of The Harlequin, Watford, is acquired for £162 million in a dramatic resolution of a legal dispute.

1995

• Previous years’ negative comments about the UK life industry prove prophetic as TransAtlantic sells its Sun Life interest to UAP for £527 million, a £260 million profit on cost.
• TransAtlantic repurchases 40 million TransAtlantic shares at 320p per share, a large discount to net assets.
• MetroCentre, Gateshead, Europe’s largest shopping complex, is acquired for £324 million and contracts are exchanged for CSC’s development of Braehead, Glasgow.

1996

• TransAtlantic changes its name to Liberty International.
• CSC shares rise by 69 per cent, the best performing property share on the London Stock Exchange and CSC is already the fourth largest UK property company by market capitalisation.
• Liberty International net asset value continues its strong recovery to 445p per share and total shareholders’ funds pass £2 billion.

1997

• Massive revaluation surpluses on Lakeside, MetroCentre and The Harlequin, Watford, 19 per cent overall for CSC, drive powerful results as aggregate property assets pass the £2.5 billion mark.
• Braehead construction advances for opening in 1999 with 85 per cent of projected rental income already committed.

1998

• Property assets surge through £3 billion with an overall increase of 12 per cent in market values in a year when the gross redemption yield on the 20 year UK gilt fell nearly 2 per cent to 4.45 per cent.
• A site is acquired in Uxbridge, West London, for a £150 million shopping centre development while lettings at Braehead reach 96 per cent of income with a year still to go before opening.

1999

• Liberty Life’s interest in Liberty International is reduced from 74 per cent to around 30 per cent by way of a distribution in specie to Liberty Life shareholders with Liberty International obtaining a listing on the Johannesburg Stock Exchange.
• Braehead opens and proves an immediate operational and financial success.
• The group exits its Australian property activities.
• A further 45 million Liberty International shares are repurchased at a big discount to net asset value, as property shares languish compared with high flying technology stocks.

2000

• Over a third of Liberty International’s share capital is repurchased including the remaining 29 per cent belonging to former parent, Standard Bank/Liberty Life, outmanoeuvring a competitor, British Land, to whom this strategic stake had been conditionally sold. This drama is followed by a merger with Capital Shopping Centres to reduce two London listings to one.
• The year also sees the final exit from residual financial services activities.

2001

• The Chimes, Uxbridge, opens in March and the group steadily assembles a significant development programme including MetroCentre Red Mall, Oxford and Cardiff.
• In the US, the group purchases the Serramonte Center in San Francisco.
• The collapse of the US equity bubble and ‘9/11’ overshadow sentiment.

2002

• Shareholders’ funds increase to £2.7 billion after a £177 million (5 per cent) revaluation surplus and a £158 million capital raising in difficult market conditions.
• The extra capital finances a £157 million investment, increasing ownership of the Victoria Centre, Nottingham, to 100 per cent.
• Contracts are exchanged with Lend Lease to develop Chapelfield, Norwich.

2003

• A 21 per cent rise in share price to 682p, as a £341 million (10 per cent) revaluation surplus takes aggregate investment properties through the £5 billion mark and net asset value per share to 906p.
• The development programme reaches £1.3 billion, underpinning the group’s future growth prospects.

2004

• Lakeside’s modernisation works complete in July to a very favourable response while the MetroCentre Red Mall extension opens in October, restoring its position as Europe’s largest covered shopping centre.
• Net asset value climbs through the £10 mark to 1017p while the share price rises 42 per cent to 971p. The annual dividend is increased by 6 per cent to 26.5p per share – this represents a growth multiple of some six times in 20 years from the 4.55p per share declared in 1984. Shareholders’ funds reach £3.25 billion.

2005

• Sir Donald Gordon retires as Chairman in June on his 75th birthday; he is appointed President for Life.
• Sir Robert Finch is appointed Chairman.
• John Abel retires as Managing Director of CSC; Kay Chaldecott appointed.
• Joint venture with Prudential adds material interests in Manchester Arndale and the Mall, Cribbs Causway, Bristol to the shopping centre portfolio.
• Chapelfield shopping centre, Norwich opens, and major progress made in developing St. David’s 2, Cardiff (joint venture with Land Securities) and Westgate, Oxford. Record property revaluation gain of £565 million.
• A 19 per cent total return for the year achieved.

2006

• Greenwich town centre site in Stockwell Street acquired for development.
• Capital & Counties disposes of its Kingsreach complex on London’s Southbank for £80 million.
• London’s Covent Garden acquired for £421 million.
• John Saggers retires as C&C’s Managing Director and Ian Hawksworth appointed.
• An agreement with Provogue to develop shopping centres in India is signed.
• It is decided to adopt Real Estate Investment Trust (REIT) status from 1 January 2007.
• Total investment properties valued at £8.2 billion, increased from 7 billion in 2005. Dividend per share increased to 31p.

2007

• Real Estate Investment Trust (REIT) status from 1 January 2007.
• GIC RE, the real estate investment arm of the Government of Singapore, acquired a 40 per cent share in CSC’s interest in the MetroCentre, Gateshead for £426 million. CSC continues to manage the MetroCentre.
• The Great Capital Partnership, a 50:50 joint venture with Great Portland Estates plc (’’GPE’’), was formed to own, manage and develop a number of Central London properties . GPE is responsible for day-to-day asset management of the partnership properties. Partnership assets valued at £654 million at 31 December 2007.
• Acquisition of a 50 per cent interest in EC&O Venues (Earls Court & Olympia Group) for £54 million. The group owns and manages the Earls Court and Olympia Exhibition Centres in West London and the Brewery, Chiswell Street, London EC2.
• Investment in Covent Garden increased to £1.4 billion by 31 December 2007.
• Total investment properties valued at £8.6 billion, increased from £8.27 billion in 2006. Dividend per share increased to 34.1p.