‘It felt like a big call’: the property boss who bet workers would return to the office … and won
Simon Carter of British Land says that, with high-end facilities at a premium again, gambling on construction during the pandemic has paid offA winter garden filled with plants, dedicated areas to suit both extrovert and introvert workers, a “social lobby”, and a cycle ramp into the building: this is the office of the future.Well, at least a version of it – as envisioned by property developer British Land and to be made reality within a vast new project at 2 Finsbury Avenue, or “2FA”, in the City of London.With the world of work upended by the pandemic, the bells-and-whistles development is designed to offer companies everything to keep the modern white-collar worker satisfied in the office.FTSE-listed British Land believes 2FA will provide an “instantly recognisable addition” to the London skyline, with one 36-storey and one 23-storey tower, linked by the winter garden at the top of a 12-storey-high “podium”.In the post-Covid world of work, large companies on the hunt for high-end workplaces have new demands, including outdoor space, says British Land’s chief executive, Simon Carter.
“It’s about having the right types of space within the building because of the way in which work’s changed,” Carter tells the Observer from a room in British Land’s neighbouring building 3 Broadgate, overlooking the 2FA construction site and Liverpool Street, now the nation’s busiest railway station,“It’s less about rows and rows of desks and functional work, and that’s why our customers are allocating more of their space to break-out areas, community areas, quiet booths for taking phone calls,”British Land, which owns blocks and retail parks across the UK, has serious motivation for preserving the value of urban offices,The company, founded in 1856, manages £13,6bn of assets, including £8.
9bn directly owned.Its share price never recovered from the brutal 2008 financial crisis, and the stock is still well below its pre-Covid value.In late 2020, as Carter was promoted from finance chief to chief executive in the depths of the pandemic, many were forecasting the death of the city centre office.However, Carter believes the contrarian decision then to commit to constructing some large office buildings, including a separate development at 1 Broadgate, is now paying off, as city office rents rise and large companies have issued return-to-office mandates.Due to be completed later this year, 96% of the office space in 1 Broadgate has already been let, to companies including real estate firm JLL and law firm A&O Shearman.
“We had some big calls and they certainly felt like big calls at the time,” Carter recalls,“Some of the rhetoric at the time was ‘we’re never going to return to the office, there’s been a paradigm shift’, and we didn’t really believe that because we just felt that organisations were better together in the office,” he adds, casting his mind back to spring 2021, when he and his team decided to press ahead with developing 1 Broadgate, following both gut instinct and research,“We tried to be a data-led organisation, rather than following the herd, and we could see that businesses were still taking space,” Carter says,“We felt there would be a lack of supply because others weren’t developing,”Commercial property companies would naturally be expected to sing the praises of office working: British Land’s staff are expected to spend four days a week at their desks, while Carter says he “occasionally” works from home on a Friday.
However, footfall at its buildings is back above pre-pandemic levels on the “core” midweek days: Tuesdays, Wednesday and Thursdays.Office attendance also appears to have “evened out” across the week, although Fridays remain quieter, which Carter believes could be a “permanent shift”.The commercial property market does, indeed, appear to have revived after the pandemic.Rising office rents have been attributed, in part, to a 5m sq ft shortfall in the supply of new or substantially refurbished office space, according to figures from real estate adviser Cushman & Wakefield.Carter pulls a photocopied investor presentation out of his backpack and produces a chart to illustrate his point.
“I like numbers,” he says with a grin, perhaps unsurprisingly, given his background as a trained accountant,Another of Carter’s “big calls” during the pandemic was the decision to focus its portfolio on out-of-town retail parks, rather than traditional shopping centres such as Sheffield’s Meadowhall, in which British Land sold its stake in a £360m deal in 2024,It instead ploughed £711m into retail parks in 2024, and is now reporting “highest-ever” occupancy rates of 99% at these locations,The commercial property sector, with its reputation for being cyclical, appears to be in the second phase of its usual pattern, where recovery is followed by a period of expansion, before oversupply hits, then recession,Carter’s career has also been cyclical, albeit with fewer peaks and troughs.
He first joined the organisation he now leads just a few years after graduating in economics from Cambridge, followed by an accountancy qualification and time as a derivatives trader at UBS.From there, he was hired for the treasuries team at British Land, when it was still led by celebrated property executive Sir John Ritblat.After more than a decade at the company, Carter worked at other real estate firms, before returning as finance chief in 2018, rising to the top job in late 2020.He took the reins as England plunged into a second national Covid lockdown, throwing the commercial property industry into further turmoil, with tenants including retailers, gyms and hospitality businesses unable to pay their rent amid months of enforced closure.Those days seem a world away on a bright spring afternoon, as construction work continues on 2FA.
The firm’s buildings at Broadgate are among four “campuses” across the capital – including the new Canada Water development – which combine office buildings with shops, gyms, bars, restaurants and communal open spaces.British Land has already agreed to let at least a third of 2FA to the hedge fund Citadel, totalling over 250,000 sq ft of workspace, with an option to rent more, at £100 per sq ft.That price was once considered exceptional, but analysts forecast rents will climb further, while in 2024 there were more deals over £90 per sq ft than in the previous four years combined, according to Cushman & Wakefield.Companies are prepared to pay a premium for high-quality offices to entice employees back to their desks, Carter says, adding that many organisations want workspaces next to major transport hubs.“[Companies] really see the benefits in getting their people back and retaining and attracting talent by having a world-class headquarters,” he says.
“But we fish in the UK HQ pond,This is what we provide, and I think there’s less sensitivity to price; it’s the quality of the product,”On a midweek evening, Broadgate’s bars and eateries are abuzz with suit-clad employees grabbing a post-work drink, and groups of friends eating dinner,Carter’s belief that the capital would bounce back from Covid looks to have been on the money,Age 49Family Married with two children.
Education Torquay Boys’ grammar; economics at Cambridge,Pay £2,5m last year,Last holiday Skiing in Switzerland with friends from university,Best advice he’s been given “John Ritblat said: ‘Simon, there are times when the best strategy is glorious inactivity’.
I quite like that: it’s his view that real estate is cyclical.”Biggest regret “My grandfathers fought in the war and as a teenager growing up, they’d tell war stories around the dinner table on a Sunday, and I wish I’d listened more.”Phrase he overuses “I love it when a plan comes together”, from 80s US TV show The A-Team.How he relaxes Tennis and cycling, including cycling 28km into the office some days in summer.
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My twin sister, Eleanor Hards, who has died aged 73, worked for a decade as a pharmacist at the Christie hospital in Manchester and then in retail pharmacy in Manchester, Lincolnshire and Oxfordshire. After moving in 1987 to what she called the People’s Republic of Didcot, Eleanor was also active in Labour politics. In May 1995 both Eleanor and her husband, Nick, were elected Labour town and district councillors, Eleanor specialising in housing and public health; she stood down as a district councillor in May 2019.Born in Lincoln, she was the daughter of John Jones, a vicar and hospital chaplain, and Janet (nee Roberts), a former nurse and later a health visitor. Our father liked to tell the story of how, in July 1951, he had to visit the local pram shop to cancel his order
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