The Interview: Toby Courtauld, Great Portland Estates

Toby Courtauld is described by one seasoned observer of the property sector as "very young, very upper crust and a very nice bloke". It is hard to disagree with these qualities as the most immediately striking feature of the man who was appointed chief executive of Great Portland Estates at the age of 33.

Toby Courtauld is described by one seasoned observer of the property sector as "very young, very upper crust and a very nice bloke". It is hard to disagree with these qualities as the most immediately striking feature of the man who was appointed chief executive of Great Portland Estates at the age of 33.

Though applauded for getting a staid property company into shape over the two-and-a-bit years that he has been in charge, Mr Courtauld has some explaining to do.

This week, he declared the end of the downturn in the property sector and announced that the company would be returning more than £100m to shareholders. Surely, the group ought to have been spending its spare cash on buying property in anticipation of the rebound?

"It is seemingly a bid odd," concedes Mr Courtauld. "Here we are, saying we are on the road to recovery and at the same time giving money back."

The logic of the move has baffled some in the City. One of the leading property analysts, Michael Prew of Citigroup, says simply: "They should have taken advantage [of the downturn]. They had the firepower. They just didn't use it."

This is a charge that Mr Courtauld is keen to confront head on. He insists the company has not been cautious in evaluating acquisition opportunities. It is just that attractive deals have not been on offer.

He says that property is an industry "driven by information", which means that companies have the greatest advantage operating in an area in which they specialise.

Great Portland is focused on central London, the West End in particular. In the area, the pickings have been very poor, he says, adding: "We have looked at billions of pounds of deals in the past two years and I can only think of one or two examples that I regret not doing. It is as stark as that."

In the past 12 months, there have been seven acquisitions of more than £10m in London by listed property companies. Great Portland did two of those. That means "we are punching significantly above our weight," he says. If Great Portland was active all over the country, it would be harder to argue that it could not spend its money, he adds.

He also points out that even after returning the £100m to shareholders, the company retains some £200m worth of cash and bank facilities. Tellingly, before announcing the return of money, Mr Courtauld briefed the company's biggest shareholder, Liberty International, another property group that is run by the wily Donald Gordon, and got it on board for the plan.

"There are some points in the cycle where a responsible management says to shareholders, you might want some of your money back," Mr Courtauld says.

What everyone agrees on is that the property cycle in the past three years has been very unusual. The falling rents that were seen did not translate into falling prices of property up for sale. The key, says Mr Courtauld, is that interest rates remained low, meaning that there were very few forced sellers - unlike the early 1990s.

"In the early 90s, if you had a balance sheet, you'd have been singing and dancing all night," he says.

What is the secret of Mr Courtauld's success that has seen him running a FTSE 250 company at such a young age? He had an upbringing he describes as "privileged" - his family are Courtaulds, who used to own the textile empire bearing that name. However, the family had cut ties with the business by the time he was born and his parents worked in the Far East - sending him to prep school in England at the age of eight, followed by Eton.

Mr Courtauld has had to make his own way in the world and that meant taking a job as a graduate trainee, at MEPC, then a giant of the property world, soon after graduating from Cambridge university.

The lucky element was that, in 1991, he joined in the middle of a recession, so MEPC took only one trainee that year. It meant that Mr Courtauld was sent around all parts of the business, gaining the widest possible experience.

He says that, unlike his peers, who were attracted to the City or the professions, he wanted to deal with something more "tangible". Going to see his parents in Hong Kong helped instill the territory's passion for property assets in the young Toby Courtauld.

"I like getting my hands dirty. And property really isn't rocket science. You don't have to be that intelligent to be in it. You are dealing with assets you can easily understand, see the effects of what you are doing, almost immediately," he says.

By 2000, when the MEPC management took the company private, Mr Courtauld was fairly senior and took part in a deal that netted millions of pounds for the team - much of the portfolio was sold off once it was in private hands. He insists it was a good deal for the shareholders and points out that investors at that point were desperate to get out of "old economy" stocks.

Mr Courtauld is diplomatic about the condition in which he found Great Portland when he took the top job in 2002. He admits that the company had more-or-less given up on development activity for the previous decade - it just sat back and collected the rents.

Analysts say that the company made some ill-advised moves outside its central London base, took on some very expensive debt and failed to work its portfolio (currently valued at almost £750m).

Mr Courtauld is credited with enticing good people into the company. The basic problems have been tackled. He stresses that his is an inclusive style of management that relies on the abilities of others. There is now an active development programme.

"It is true that a lot of the [property] industry was lazy for quite a long time. That is something that you cannot to do now. You cannot, as an asset-based company, rely on inflation any more to deliver you growth. You have to work your assets much more."

From Eton to West End

Age: 36

Education: Eton, Cambridge University, from where he graduated in 1990, read geography

Career: MEPC 1991 to 2002, joined as graduate trainee, worked up to be a director of the UK business

April 2002 - present: chief executive of Great Portland Estates

Interests: sailing, "keeping my family sane" - he has two young children

Lives: Notting Hill, London