Property tycoon Ronson: It's survival of the fittest
Tycoon Gerald Ronson warned the crumbling property sector is in such dire straits that it is now a case of 'survival of the fittest'.
Warning: Tycoon Gerald Ronson says the economic climate means it is now survival of the fittest
The elder statesman of the industry, and Heron International chief, told a seminar for the Jewish Association for Business Ethics: 'It's a very, very difficult situation. Now it's survival of the fittest, every person for himself.
'2009 is going to be worse – if you haven't got any cash you are in deep s**t.'
The controversial developer knows what he is talking about, having suffered a virtual collapse in his property empire in the crash of the late eighties and early nineties.
Ronson, who founded the group in 1956, managed to save the business only with the help of a few powerful friends.
It was Bill Gates, Rupert Murdoch and Oracle boss Larry Ellison who backed him with new loans. His firm is now one of Britain's biggest private real estate developers.
The outspoken property boss also attacked the banks for their part in the current economic meltdown, saying: 'There was a lot of irresponsible lending.'
And he is not the only industry chief with a nihilistic view of the commercial property sector, where values are plummeting as tenants are cutting back the amount of space they need.
Nick Leslau, who runs and owns Prestbury Group, agreed with Ronson, saying: 'Values have been decimated. It's all about survival now.'
Their downbeat assessment of prospects came as Quintain Estates & Development said it is experiencing the most difficult conditions ever.
Quintain, which is responsible for some of the country's largest urban regeneration schemes in the Wembley and Docklands areas of London, revealed the net asset value of its portfolio fell 37% to 439p a share at the end of September. The shares were unchanged at 37p last night.
The group also made a pre-tax loss in the half of £52m, after a £4m loss in the same period last year. Quintain said valuations of its directly-held properties fell 20% to £869m.
Broker Arbuthnot Securities said: 'The fear of course, was that the company might go bust. There is a sense of relief that there is nothing scary in the figures.'
Separately, residential landlord Grainger (up 15p at 85p) said the value of its portfolio fell just 7.6% to £2.26bn as it reported annual pre-tax losses of £112.1m, compared with a profit of £77.5m last year. The dividend was maintained at 6.18p.
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