In the hot REIT?

If New Year is a time to embrace change, it is advice that one of real estate's big names has taken to heart. After five years in the role, it has been announced that Simon Carter is to stand down as chief executive at British Land, with a move to logistics platform P3 on the horizon.

While his exact departure date is as yet unknown, the length of his tenure is pretty much average for FTSE 100 chief executives, and the period since December 2020 has presented plenty of challenges to come to terms with. Given this context, while his decision to move on wasn't necessarily expected, it will not be too much of a surprise to the market.

Analysis from Green Street News this week showed that total returns to British Land's shareholders during Carter's time at the helm were 10.9%, middle of the pack of listed peers, but better than many REITs in both the UK and Europe. Hammerson's retail focus saw it return 63.7% over the same period, but office specialists such as GPE (-34.9%) and Derwent London (-31.8%) did much worse.

This speaks to the challenges of running a public company, with a huge number of shareholders - inevitably calling for a wide range of strategies to be implemented - to keep happy. The performance of specialist REITs, doing either very well or poorly, perhaps shows the extent to which propcos were at the mercy of a market in flux since 2020. By making calls about rising and falling asset classes, Carter insulated British Land from the worst of the lows, but could fully capitalise on the highs.

All of this, plus Carter's new home - a private equity European logistics platform, backed by Singaporean sovereign wealth fund GIC - does raise some interesting questions about where the industry's senior talent sees the best opportunities.

After half a decade running a big public corporation with a diverse portfolio, the attraction of P3 is understandable. A committed backer with plenty of capital, a settled strategy on a single asset class and a (very) long term view will make a refreshing change for Carter, who will presumably relish being able to get on with the job without the distractions of regular reporting and competing investor demands. And without wishing to speculate on his compensation, he will presumably continue to be well remunerated without his paycheques being subject to public scrutiny.

But that is not to say the top jobs at listed firms are without their attractions. These positions provide a profile, influence and heft of voice that is not there to the same extent for those leading private companies. The big UK REITs are storied names, and heading them up rightly confers a certain prestige. What's more, the need to manage reporting, stakeholders and different forms of capital-raising arguably helps to widen an individual's capabilities beyond real estate investment and development know-how.

Property was once the preserve of private money, but it was growing capital requirements that saw publicly-listed firms rise to prominence. That shift has arguably reversed as private equity has taken an increasingly important role, but the listed firms still hold considerable interest for the ambitious and talented. It is one of the sector's strengths that it has such a diverse range of companies and capital sources to draw on, a competition that helps drive a healthy marketplace.