Helical boss on rent collection, London’s future and office reopenings

Helical has bucked the trend of many fellow landlords, pulling in 92% of its March quarterly rent payments. And although the company has reduced its final dividend by 20% to 6p per share as part of measures to cut costs and preserve cash, it has not scrapped the payment altogether – unlike several others. Helical’s portfolio was 82% let at the end of March, generating rent of £37.6m, and its portfolio valuation was up by 5% to £819.6m. EG spoke to chief executive Gerald Kaye, who has returned to the company’s Mayfair office, about what the next quarter rent day will look like and what the future holds for the office as companies embrace working from home. Having received 92% of the March quarterly rent payments, what do you expect from the June quarter day? Only 2.4% of our rent roll is food and beverage and retail. The rest is office. If you’re running food, beverage or retail and you haven’t been able to open, then, obviously, we completely understand that paying rent is not going to be easy. If you’re running an office, chances are you can work from home and many people are saying how productive it is. If it’s that productive, I’m sure they can afford the rent. Let’s see what happens. We’ve written to all our tenants and said that if they are having genuine difficulties, we are happy to have a discussion with them. We make the point that if people can pay and do pay then it means we can be more helpful with those that are in difficulty. What are you doing to enable your occupiers to return to their offices? We went round our London portfolio last week and talked to all of the managing agents, and our building managers are doing a great job. All appropriate measures are being taken to minimise touchpoints, to observe the 2m distancing. You mentioned that the leasing market had slowed in the year-end results. What is the leasing market like at the moment? When the 2m social distancing can be eased, it will be far easier for everything to pick up again. We do believe there is a shortage of new grade A space, like the quality of Kaleidoscope [the 88,600 sq ft office building built over the Farringdon East Elizabeth Line Station]. There is interest there, but it will become firmer once people are back at work. Helical is towards the end of its development pipeline. Are you looking for new opportunities? We bought 33 Charterhouse Street, EC1, with Ashby Capital last year and we’re on site and we should have that finished in summer 2022 and we want to add to that pipeline. We are looking for new opportunities, whether they are repositioning, refurbishing or redeveloping. London has a huge amount to offer and there remains a lot of demand for real estate. What do you think the future of the office is? There is a quote from Mark Twain: “The reports of my death are greatly exaggerated”, and I would make that point strongly. The sun has been shining and [people] perhaps don’t realise how unproductive it is [working from home] just yet and they think they can carry on. But working from has immense limitations such as IT quality, poor wellbeing. It’s pretty lonely and boring. How does your team develop when their only interactions with colleagues is via Zoom? How do the younger members of the team pick up the experience from the more experienced people around them? When you’re sitting in an office, you’re listening to all the conversations going on and absorbing it. You just don’t get that at home. I’ve never been away from the office so long in my career and it’s great being back and just having a few colleagues around you. The office is vital, but we’ll see more space per person because I think offices have got too densely packed. And as for hot-desking. Well, do you really want that person sitting at a desk before you if they were sneezing all over the place? People won’t like it and are going to be far more aware going forwards. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette