Under The Radar, Lazari Family Continues To Build Up £3.3B West End Giant
High-profile property companies like Grosvenor, Great Portland Estates and, more recently, Amancio Ortega’s Pontegadea have won plaudits and made profits by keeping a laser focus on London’s West End. But a low-profile rival has built an equally impressive portfolio in the highest-valued part of the UK capital, with new results highlighting how this strategy continues to pay off.
Lazari Investments is one of the largest property investors in London and is one of the giants in the West End. The most recent accounts for the company filed at Companies House last week show that in the year to March 2020, the value of its portfolio grew by 1% to £3.35B. Just less than 94% of this is in the West End, valued at £3.15B, about the same as the Grosvenor London estate and just behind Pontegadea’s £3.4B portfolio (albeit miles behind the Crown Estate’s £8.2B London portfolio centred around Regent Street.)
While Grosvenor has been building up its West End holdings for 400 years, Lazari Investments only came into existence in 1976. The family-owned company was started by Christos Lazari, who arrived in London from Cyprus in the early 1960s as a 16-year-old with, as he put it in an interview with Forbes, “£20 in my pocket.”
He washed pots and pans and worked in a sweatshop before studying fashion and setting up a successful high-street label. He began investing in property in 1976, and he built up an empire that on his death in 2015 transferred to the stewardship of his two sons, Nicholas and Leonidas, and daughter Andrie, the company’s directors and owners.
The company’s portfolio now totals 3.1M SF, 2.6M SF of which is in the West End, with the remainder in north London. The company owns 132 buildings with 487 occupiers and has a heavy office focus — 72% of its rent comes from offices, 20% from retail and the rest from medical properties, leisure, residential and car parking. A big chunk of its retail holdings are represented by the Brunswick Centre, the Bloomsbury shopping centre it bought for £135M in 2014. The overall portfolio was 97% occupied on 31 March 2020.
Once the impact of valuation movements was stripped out, the company made an underlying operational profit of £43M, with rental income rising 7% to £124M. The company has £2.2B of debt, putting its loan-to-value ratio at 65%. In September, it refinanced a portfolio of five offices totalling 630K SF with a new £400M loan from Allianz.
The company flagged the impact of COVID-19 in the results, even though they run to the period just before the start of the coronavirus pandemic. It said that in September, it collected 62% of the rent it was owned, but it had enough cash in the bank and rent deposits from tenants to keep meeting its liabilities. It said it expects the value of the portfolio to fall but the West End to remain resilient because of limited supply in the district.
Significant recent(ish) acquisitions it pointed to include 23 Savill Row, bought in June 2019 from a joint venture between Angola’s Central Bank and LaSalle Investment Management for £278M. It has a development programme that will see it add 129K SF of net additional space at a cost of £140M and will add about £41M a year in rent. Two-thirds of this space has already been leased.