Property Chief Martin Barber Faces Axe

THE chief executive of Capital & Regional, one of Britain’s biggest shopping-centre and retail-park owners, is to be ousted after a boardroom bust-up.

Martin Barber, one of the best-known figures in the commercial-property industry, is expected to leave the business soon – an announcement could come in the next few weeks.

City sources said the group was this weekend putting the finishing touches to an agreement with Barber under which he will leave the company with a compensation package.

The news comes after the firm revealed in December that Barber would “retire” from the company in August 2009 when he turns 65. It seems that his departure will now come much earlier.

Insiders said that Barber had been forced out after a row with chairman Tom Chandos and the rest of the board following a slump of almost 70% in the company’s share price since last spring.

It is thought that headhunters at Spencer Stuart have already been instructed to find a replacement, but no deal has yet been signed.

One name mooted is Hugh Scott-Barrett, the former finance director at ABN Amro – but it is unclear whether he is still in the running.

Just a year ago the shopping-centre and retail-park specialist was one of the top-rated firms in the listed property sector. Its share price rose sixfold in four years – peaking at £16.29 in the spring of last year, but since then it has slumped to £5.09, valuing the business at £362m.

In December the group suffered the ignominy of being forced to announce that it might have to repay lucrative fees earned during better times. The repayments would cost the company up to 50p a share.

Capital & Regional is also facing restrictions on its ability to raise new debt because falling property values have put its loan-to-value debt covenants under pressure.

The company was recently forced to deny that it had breached banking covenants on Mall, its shopping-centre fund. Nevertheless, the firm is preparing to sell two or three shopping centres from its Mall Fund.

The news comes as Capital & Regional prepares to unveil its results this week. Analysts expect the group’s net asset value per share – the bench-mark performance indicator for property companies – to slump by more than 20% to about £10.20 a share.

The company’s recent woes have triggered intense speculation that it could become a takeover target.

Barber could not be reached for comment. Capital & Regional declined to comment. Staff at Savills, the estate agent and commercial-property consultant, are tipped to share a record £150m bonus pool this year.

The bonus bonanza – which would trump the £125m achieved last year – is expected to be announced this week when the company unveils record full-year results. The £150m pot is expected to include a combination of bonuses and commissions – which will be split out for the first time.

The group issued a bullish trading update in January, when it said that its full-year results were likely to be slightly ahead of expectations, so analysts have pencilled in underlying group profits of about £86m, up from £75m last year.

Management said that a good performance in its consultancy, property and facilities management and financial-services arms helped to offset a weakening in commercial markets towards the end of the year.

The company is, however, expected to caution that the outlook for 2008 is more uncertain because the turmoil in the financial markets looks set to continue for a while yet.

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