Following a trip to the US made by Andrew Rogers (to sort out a management issue for GMS of an investment), GMS changed its name. Andrew had discovered that the word ‘syndicate’ had a more specific meaning, conjuring up visions of the Mafia, or Cosa Nostra as it is better known in America. His trip followed the release of The Godfather book and film, which highlighted the role of Mafia ‘families’ and ‘syndicates.’ It was for that reason that the company’s name was changed to GMS Estates Limited.
The work at GMS was building up fast during the 1970s, particularly involving both Robin Gibbon and Andrew Rogers, as the shift of emphasis moved slowly from nearly all residential to a bigger mix of commercial and residential.
The new decade saw a real improvement in the activities of GMS, rapidly bringing extra revenue, especially following the relaxation of controlled rents, which had been a curse of the immediate post-war years, severely restricting the amounts available to be spent on improving the properties. The GMS decision, taken in the 1970s, to stick with its residential portfolio ultimately paid off when the 1988 Housing Act came into effect and ended the creation of any new Rent Act tenancies. As flats became empty they could be re-let on the open market at economic rents, on tenancies with only limited security of tenure.
By the mid 70’s with earnings, retail prices and inflation rising, the dramatic increases in property values improved the asset value of the hundreds of residential and commercial buildings now owned by GMS.
However, many of the properties in Bayswater were old buildings with substantial constructional and design flaws which meant very high maintenance costs, and the rents were not producing enough to keep matters on a firm financial footing. In reality, the residential properties were being subsidised by the commercial properties. So it was agreed to sell some of the expensive residential property, and the capital used to reinvest in commercial properties – the seed of growth that occurred in the 1980s and 1990s.
The acquisition plan was formed with a view to buying smaller properties, or at least properties that would not interest the major property players. At that time institutions were acquiring the bigger properties, and were looking for a simple approach to management where they could own the building and just collect the rents. The GMS board was after properties that were too small to be of interest to the institutions and that needed a little sorting out, and perhaps intensive management – aspects that the company was particularly good at handling.
There were still plenty of competitors in the market, and it was not always easy to find the right properties. With a healthy financial balance in hand, GMS could afford to wait until the right buildings came along. The escalating property prices meant that assets were appreciating fast. With the new approach and a substantial balance in hand GMS was expanding in a controlled and organised manner.
The sale of properties in the GMS residential portfolio largely fell under the control of Andrew Rogers in the 1980s. The board was extremely careful not to sell wholesale, but bided its time and waited for the right moment to sell a particular property or properties. By 2000 the residential sale programme was about 85 per cent complete, and the monies raised had been reinvested in different commercial properties, including central London offices and shops, some with a residential element.
In the boom to bust of the late 80’s, GMS was one of the few companies to fare better than most. Its policy of reinvestment in commercial or mixed properties, together with holding back a slice of rent income for reinvestment, was working well. But more importantly it did little if any borrowing; gearing works well when a company is struggling to expand, but can be a sword of Damocles during the difficult times.
In the light of the Stock Market crash the board took a more cautious approach to new investments, but during the following years some notable acquisitions were made including a portfolio of FW Woolworth shops, a portfolio of eight retail properties in Bayswater from MEPC Plc; the Kingsway House block of property from MEPC, and Outer Temple and Abchurch House from Benchmark PLC.
GMS continued to look for properties that had potential long-term growth. An example was a former dolphinarium at 10, Soho Square, London, which was converted by contractor Lelliots into modern air-conditioned offices in 1987. Under the watchful eye of surveyors Gibbon & Rogers, the refurbishment was the first significant central London commercial development carried out by the company.
In 1990 Andrew Rogers was appointed Managing Director and Tom Gibbon joined Gibbon and Rogers to assist with acquisitions and refurbishments of commercial properties including Centurion House in Aldgate High Street and Eastleigh House near Southampton which involved the refurbishment of a 1970s office building. In 1997 both Andrew and Tom became full time Executive Directors of GMS allowing them to concentrate full time on the GMS Portfolio and the refurbishment of Outer Temple which was the first project managed in-house by GMS. At the same time Adam (Robin’s son) joined the Board to reinforce the family property expertise on the Board.
In 2005 upon Andrew’s retirement from full time involvement and his move to Chairman, Tom Gibbon took over as Managing Director. And so, with a story of nearly 160 years of property, from the 19th to the 21st century the company continues to operate as it has always done, with a quiet confidence and pretty much as ‘old Henry’ Gibbon and his three daughters would have wished. Today’s shareholders are the descendants of the founding Gibbon, Moore and Simpson families and fifth-generation family members make up the majority of the board.
Despite the economic downturn starting in 2008, GMS continues to perform well; the portfolio has grown and been enhanced and significant improvement programmes are anticipated for the next few years. The head office at Great James Street has been through its own metamorphosis, with new modern working space having been created, whilst retaining original features with a clear nod to the company’s traditional values.