Q&A: Stephen Hester, British Land chief executive on the credit crisis’ impacts

What is your view of the impact of the credit crisis on the property

We are in uncertain times from a global perspective, both in terms of the
impact on global markets and on real economies. At British Land we have
anticipated more difficult times in property.

We obviously didn’t anticipate the specifics of the debt market turmoil we’re
currently in, but I think that we have positioned ourselves well.

If we turn to the London office market. We’ve talked
about the uncertainty there is about the credit crisis and the possible impact
on jobs, the possible impact on the economy. Does that represent a threat to
your development programme?

Any office market in the world, in the long run would like to be in London,
because the service industries that power London’s economy have grown for a long
time ahead of gross domestic product and will in the decades grow ahead of GDP,
with London’s expertise anchored in the multinational pool of people here.

It’s undisputed in terms of its role in the service sector internationally.

Do you feel any pressure to split the business into smaller
specialist REITs?

The topic of specialist REITs will be much talked about again in coming

We are here to produce out performance for shareholders and we will be
open-minded at all times about how to do that in terms of our business strategy
and structure.

But we have looked at this issue and our belief is that the best way to
create value for shareholders is actually to create profits and asset values
that over time go up and outperform the industry.

So, as far as we can see, reducing your profits by reducing your ability to
pick sectors, by reducing your economies of scale and reducing your ability to
take risk, is not the way to outperform in the property markets.

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