The four UK high street banks may have racked up bad debt provisions of over pounds 5bn in 1992, much of it due to the post-Eighties property crash, but this is not putting the banks off from supporting another wave of development.
Godfrey Bradman, Martin Landau, Gerald Ronson, Stuart Lipton, Trevor Osborne and Paul Reichmann are all back in business, showing the younger generation of developers how it is done.
Property development proves that there is at least one area of British business where failure is no barrier to subsequent success.
Take Godfrey Bradman, the former tax specialist who built the Broadgate office complex in the City, but who then lost control of the development in the recession and saw his company, Rosehaugh, go bust.
Mr Bradman is now back buying and selling development land, and recently sold a package of land in Paddington Basin to Elliott Bernard of Chelsfield.
Part of Trevor Osborne's Speyhawk company went bust in the recession, and he is now back as head of Trevor Osborne Property.
Probably the biggest player of them all, Paul Reichmann, saw his Olympia & York global property empire crumble in 1992 when Canary Wharf, now The Independent's home, went into administration. Mr Reichmann then led a consortium which bought the development back from the banks, although he is thought to have only around 10 per cent of the equity.
Then there's Martin Landau, who developed Royal Mint Court in the City. He merged his company City Merchant Development with Imry and sold out - at the top of the Eighties property boom. Imry subsequently went bust, leaving its banker Barclays to dispose of its properties.
Mr Landau is now back as head of Development Securities, with Lord Gowrie as chairman. This new company is redeveloping MI5's former headquarters at One Curzon Street, Mayfair, which it acquired at the end of 1995 for just over pounds 55m.
Stuart Lipton sold his company Stanhope to British Land, and is now back with new ventures.
Gerald Ronson has also made a dramatic comeback. His company Heron unveiled a pounds 200m residential and commercial development near Chepstow in South Wales last week. The development, if approved, will cover 500 acres and include a new bypass for Chepstow.
Heron nearly collapsed in the post-Eighties property crash. It only survived with the support of over 80 banks, which allowed it to write off around pounds 1bn. New investors then injected over pounds 100m of capital, leaving Mr Ronson with just 5 per cent of the equity.
As one insolvency specialist said yesterday, Mr Ronson is "probably the only developer of that generation who is still in the company he started in". Mr Ronson founded Heron in the early 1960s and has since ridden three recessions. "He would've survived this one except he bought a US bank which went sour the same time as the property crash," the insolvency man adds.
This prompts the specialist to describe the UK property cycle: "At first the banks lend money to the developers in order that the banks can make their assets work for them. The quickest way to expand a bank's balance sheet is to lend to developers.
"Then along comes a recession, and the banks are left with property assets that are illiquid. They can't get out, they can't sell the property.
"Common sense would suggest that they should then sit on the property until the markets recover. But they don't. The banks always decide that they must get their money out immediately. So they sell out at the bottom of the market. Then the property market recovers, and they start lending to exactly the same developers. It all starts over again.
"Sometimes I think the banks might be better off putting their money on a horse at Ascot," the insolvency man concludes.Reuse content