Britannia Radio

BY HARRY UNDERWOOD

FIRST POSTED SEPTEMBER 22, 2009

The news that Paul Reichmann, the veteran Canadian property tycoon, has been forced to sell his remaining stake in Canary Wharf, now surely marks the end of his 22-year involvement in the property development which, more than any other since the war, has changed the landscape of London.

Reichmann first dreamt up Canary Wharf in the late 1980s. He left it under the cloud of bankruptcy in 1992, and then amazed everyone by returning to the helm only three years later. But in the wake of the banking crisis, his ties are finally severed.

Reichmann stands out amongst the suited sharks of the real estate world. Firstly this is because of his age - he's now an old man of 78. Then there's his appearance. A devout Orthodox Jew, he's tall, stooped, big-eared, bearded and often wears a black kippah cap.

‘My religion won’t let me go to Las Vegas. My investments are my Vegas’His life story is also unusual. One of five sons of a successful Hungarian egg wholesaler who settled in Vienna, his family escaped Nazi persecution, first by chance - they were paying a visit to their ailing grandfather back in Hungary at the time that Vienna was besieged by a violent anti-Jewish pogrom and Austria signed the Anschluss with Germany - and later by fleeing to Paris.

Then, after escaping south to the sound of German gunfire, the Reichmanns headed through Spain to the safety of Tangiers. There, led by Reichmann's mother, the family helped to coerce General Franco's Spanish government into sending shipments of food parcels to the inmates of concentration camps.

After the war, Reichmann was sent to a Talmudic school in Gateshead, near Newcastle, and trained as a rabbi in Israel. But he traded in the teaching career he was expected to pursue and moved to Canada, where one of his brothers had set up a flooring and tile business.

From there, as the risks paid off, he started to buy buildings, and ended up developing the 72-storey First Canadian Place in Toronto, which on its completion in 1975 was the tallest building in the Commonwealth.

When asked to explain Reichmann's success, a Toronto investment banker he worked with said that it was down to his ability to grasp every aspect of his business: "He was better than his lawyer, better than his accountant, and, yes, better than his financier. He was better than everybody at everything."

By the mid-1980s, he had added property in Tokyo to his portfolio and owned more New York real estate than the Rockefellers. He was, according to one colleague, "an Einstein in a field that doesn't usually produce Einsteins", and, as gamble after gamble paid off, the Reichmann family became one of the world's richest.

At this point, Reichmann began to believe he was infallible, later admitting that "the fact that I had never been wrong created character flaws that caused me to make mistakes". He set about developing Canary Wharf, a hugely ambitious scheme, without getting enough financing in advance.

Backed by Tory prime minister Margaret Thatcher, who offered generous tax breaks and promised to extend the Jubilee line on the London Underground to reach the area, Reichmann set out to turn a rundown area of east London docklands into a mini-Manhattan. He aimed to change the map of London as we knew it.

But by the time Canary Wharf had been completed, both New York and London were in the middle of a downturn. With the Jubilee line extension taking longer than expected, Reichmann's sparkling new skyscrapers were unable to find enough tenants. In 1992, his property company, Olympia & York, collapsed, no longer able to finance its $20 billion debt.

Logically, that would have been the end of his involvement in Canary Wharf. But after a recovery which earned him comparisons with the Cinderella Man - a Depression era boxer famed for an unlikely comeback - he was back as the development's boss only three years later, after teaming up with investors such as George Soros and Prince Alwaleed bin Talal, a Saudi billionaire.

The only luxury he ever allowed himself is a collection of historic Jewish textsReichmann has always enjoyed taking risks with his investments. "My religion won't let me go to Las Vegas," he once said. "This is my Las Vegas.''

This religious devotion has continually influenced his business career. It meant that he insisted his workers stopped building on the Sabbath, and he spent much of his fortune on supporting Jewish community projects, including thriving schools and synagogues in Toronto. People say that the only luxury he ever allowed himself to throw money at is a collection of historic Jewish texts.

Reichmann has never talked much to the press. But along with this reputation for secrecy, he is known as a businessman whose handshake was as firm as any contract. This was one of the reasons why so many people were willing to lend him money.

In recent years, Reichmann has built Latin America's tallest building in Mexico City, and a swathe of retirement homes across the States. In 2006 he came out of his own brief retirement and raised $4bn in new finance.

But with the banking crisis - and especially the collapse of Lehman's which employed 4,000 people at its European HQ there - Canary Wharf has again had to face up to empty floors and a slump in revenue. After a German bank called in loans that they'd made to him, Reichmann's stake in the business has just been bought by Songbird Enterprises, a Chinese, Qatari and American consortium. It would seem as though this time, there's no way back.