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LONDON LEADS THE WAY Fredrik Widlund, CEO of CLS Holdings on challenges and opportunities in the property industry BY: LINNÉA LINDGREN
One of CLS Holdings’ properties in London. Great West House, Brentford. Photos: CLS Holdings.
SCC patron CLS Holdings is a property investment company active in the UK, Germany and France specialising in owning and managing office buildings. The company was founded by Sten Mörtstedt and remains a majority familycontrolled business that has been listed on the London Stock Exchange since 1994. The Link met with Fredrik Widlund, who has been the CEO of CLS Holdings since 2014, to talk about his career, the business and important trends in the UK market.
According to him, the expression ‘bricks and mortar’ is very telling as to why it is so fantastic to work with properties. “You can really see and touch what you do, and it is great to meet all the different occupiers in our buildings.” He continues: “We have close to 700 tenants in our properties from many different industries: government, large multi-nationals, charities, small to medium-sized family businesses and tech start-ups. I also very much enjoy the international aspect of working across different countries and cultures.”
Fredrik Widlund grew up in Stockholm where he studied Business and Economics at Stockholm University. After finishing his studies, Fredrik joined Shell in Sweden, and after a few years the company offered him a move to London to work on strategy for its UK portfolio. Fredrik later joined GE Capital where he held various international roles in financial services and real estate for the following 15 years, before being appointed CEO of CLS Holdings in 2014.
Focus on geographic diversity and local teams “Our objective is geographical diversity, so that we are never overexposed to one market,” says Fredrik. In 2016, CLS’s last property in Sweden was sold and in 2017 it exited a large development site in London, Vauxhall Square, and redeployed the capital in Germany through a portfolio acquisition. “This means that today we are active in the largest cities in the UK, Germany and France.”
“What attracted me to CLS was the opportunity to run a listed company with operations in several countries while maintaining an entrepreneurial culture. Our company is listed on the main market in London and is a member of the FTSE 250 index. Many of our property peers are domestically focused so CLS is pretty unique in its exposure to more than just the UK,” says Fredrik.
CLS has its head office in Vauxhall, London, and regional offices in Hamburg and Paris. According to Fredrik, one of its key strengths is that it has its own local teams in all countries in which it is active. He points out that CLS does not particularly believe in outsourcing and thinks that customers like to meet and do business with the owners of the property and not an agent.
Economic growth, accessibility and affordability When speaking about what areas to invest in, Fredrik says that CLS focuses on larger cities which offer strong economic growth prospects as this drives employment and ultimately the demand for offices. “In the UK this means Greater London, which is a very deep market representing a quarter of the entire UK commercial property sector. In Germany we are in the main cities such as Hamburg, Munich, Berlin, Stuttgart and Dusseldorf, and in France we are active in Paris, Lyon and Lille.” A primary consideration for all of CLS’s tenants is accessibility, so one key factor is to ensure that its properties are located close to good public transportation links. Another key factor is affordability. “Our properties are located close to major cities, but outside of central business districts, so our rents are affordable,” says Fredrik. One of the largest and most liquid markets in the world In the UK market, CLS is focusing on Greater London and the South East with over 90% of the UK portfolio by value in these areas. Some of the locations where you can find CLS properties are Vauxhall, Hammersmith, Croydon, Harrow, Uxbridge and Brentford. “Real estate is a hugely important ‘base’ industry, employing over a million people and contributing over £60 billion to the UK economy every year,” says Fredrik. In