Peel Holdings just keeps getting bigger and bigger. Neil Tague gets his head around the powerhouse that is Peel and speaks to managing director Andrew Simpson to ask: "Where next?"
Just a decade ago Peel Holdings was an ambitious property company, whose development of assets like the Manchester Ship Canal Company formed the basis for a long and hard-fought campaign to build the Trafford Centre. Since then it's never looked back.
From there it pulled off two large securitisation deals that allowed it to enter the ports and airports markets, becoming, in a few short years, the UK's second largest ports operator and owner of the two fastest-growing airports in the UK regions. It has entered the utilities and energy markets and opened up a stack of mini-shopping malls, while building a string of business parks and other commercial developments.
Looking at a map of the region it's tempting to conclude that Peel is nothing less than a quasi-state within the North West. The group's development pipeline in this region alone stands at a potential £350bn. But this is a company founded on thinking big and one that, managing director Andrew Simpson assures Insider, will continue to think big.
"The view of John Whittaker has always been that Peel should be about achieving something of longevity and substance," he says. "It is a business that looks to make a difference on a regional level. The deal with the BBC at Media City is a good example.
In many ways it will be a loss leader, but we want to make a media destination that will have a big impact on the regional economy."
The name of John Whittaker continues to dominate Peel. Now 65 years old, the Isle of Man-based Whittaker shows no sign of slowing down. With his family holding 70 per cent of the business through a variety of trusts, he's still the dominant shareholder in a business he took private in summer 2004 for £31.3bn, although the Saudi Olayan family retains a 26 per cent stake.
Predictions of his imminent retirement, when Simpson joined from tool and equipment hire business Speedy Hire in April 2005, were wide of the mark, but there have been some changes at Peel. The business has been restructured, with four main divisions - land and property, ports, airports and the Trafford Centre, although there are myriad other divisions - Simpson is a director of no less than 60 businesses, while Whittaker's appointments stand at over 200. There have also been several new arrivals.
Simpson says: "The philosophy of divisionalising is to empower the management teams of each division to take the division on and flourish as independent businesses. The process has been ongoing for a few years but is now increasing at pace. The younger businesses, like utilities, advertising and energy, need more support, whereas ports in particular is completely stand-alone now, with its own management team, finance department and methodology."
One of the arrivals has been Mark Whitworth, also plucked from Speedy Hire, who has come in as chief executive of the airports division. "Airports has gone from being a small business to a large business in a short space of time," says Simpson. "Neil Pakey's been instrumental in that and we're playing to his strengths by making him chief operating officer. To capture future opportunities we've strengthened the business, you've always got to be prepared to do that."
Peel has also hired Steve Underwood, who joined from Simpson's other former employer, NM Rothschild.
With two of Whittaker's sons, Mark and James, involved in the property side of the business, speculation suggests that Simpson is gathering a new generation of Peel management. Simpson says that's too simplistic.
"John's now 65 and the shareholders - who take virtually no dividend from the business - want to see the business continue to flourish in the future. But there's no end game in terms of John and the family," he says.
"The management has to be in place to ensure delivery in the longer term. There are some incredibly capable people who've worked with John for many years. And now that group is larger and more diverse than ever before."
Even seasoned Peel-watchers sat back and blinked when, in November 2006, it wowed Liverpool with images of gleaming skyscrapers at the launch of Liverpool Waters. Built mostly on land acquired through the 2002 Mersey Docks & Harbour Company takeover, Peel put a rough value of £34.5bn on what it says will be at least a 30-year project. It is matched with similar plans for Wirral Waters on the other side of the Mersey.
So why does Peel wish to throw itself into the maelstrom of development in Liverpool, where so many have got bogged down and disillusioned by planning wrangles and civic infighting?
The answer could be summed up as: the bigger picture. Springing across his office to unfurl a large map of the region, with Peel's holdings marked out, Simpson describes what Peel sees as the long-term crystallisation of the "world cities" talk we hear today.
"If you look at the Thames Gateway, there are billions being invested in infrastructure, transport, employment space and public amenities. John always says: "England develops the ankle, but what about the waist?' That's where we come in. We have that same estuarial entry point here
in this region, two fantastic cities and great connectivity. We see Liverpool Waters as the tip of the Ocean Gateway," he says.
"Liverpool is the entry point to a conurbation of eight million people. It's twinned with Shanghai and we see no reason why Liverpool shouldn't be the main European centre as the emerging economies enter Europe. You've got to do something of significance and real quality to make that step change. A few isolated developments and low-rise, uninspiring buildings won't cut it."
For the same reason, Peel tore up its two-year old plans for a new racecourse - Salford Forest Park - and went back to the drawing board, emerging in May 2007 with a project that should fill several gaps in the North West's leisure offer.
Simpson says: "Our plans include a world-class racecourse, a world-class golf course, world-class equestrian facilities, fantastic new forest space for walking and sports. Where else do you get all that in the North West?"
For Cobbetts partner and long-term Peel adviser Stephen Kinsey, Peel is in safe hands: "Peel take a long-term view when others might not and you always get the feeling they know what they're doing," he says. "There are new people and extra energy, but I still see John Whittaker's drive and intensity at the heart of the business."
Also in: July 2007
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