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Jun 16, 2010

Suggestions for the British Property Industry


Last Tuesday I participated in a discussion panel at the British Property Federation’s annual conference. The theme for the day was ‘New Perspectives’ and I contributed to a debate about the Landlord and Tenant Relationship. I thought it may be interesting to talk about the position I took as a representative of the consumer.

What relationship I asked myself?

Does the term tenant have any real relevance to me outside of the legal meaning? I’m a consumer of real estate, a customer of the services provided by members of the BPF. How can one explain the absence of any real meaningful relationship outside of the purely contractual, adversarial one that is the norm today?

Why do end users complain about their advisors, their landlords, their estate managers? Why does it take so long to get landlord approvals? Why is leasing space a torturous, time consuming and expensive activity?

My contribution to the session was to call for a real discussion about the changing nature of our world in order to get a few more people engaged so that we can all start thinking about our own industry and its future in the 21st century. This is driven by three factors:

1. The relationship between the provider and consumer of commercial real estate hasn’t moved on for decades
2. The fundamentals of the economic supply demand equation may well be changing due to:
– Nature of how we work is changing
– The sustainability agenda wont go away
– The dominance of the Western economies and world is getting flatter.
3. The absence of any relationship is not all the landlords’ fault.

Taking the L&T relationship, or rather the lack of it, is a huge lost opportunity. The supply side of our industry is far too introspective. There are some exceptions. To outsiders it appears as a cosy club-like world where nothing much has changed in decades, if not centuries.

Take for example the 1954 Landlord & Tenant Act – almost 56 years old and came into being when Roger Bannister ran the mile in under four minutes, Churchill was still Prime Minister and food rationing had just ended.

Another example is the language used in property leasing, for example, quarter dates for rental agreements originate from medieval times. Why do we still contract to pay rent on Christmas Day?

The industry really needs to take a long hard look at itself and recognise we’re now in the 21st century.

For many people there will always be tenants and they will also need space in the UK. I posed the following questions to the audience;-

Are you up to speed with the changing nature of work and the impact it will have on how much space users will need? At the BBC we now know how all our major buildings are used, when they are used and what they cost. It has come as no surprise to us that we can cut almost a third of the estate as we get smarter about space utilisation.

Are you aware of the growing importance of sustainability – not only environment – at Board Level?

Are you seeing a real shift in emphasis away from the Western economies to take into account the emerging economies of China, India and Brazil? What will this do to demand for space?

Whilst this may appear to be more Landlord bashing let me say that the consumer side needs to sharpen up its act too. At the BBC we’re focusing on how we become an intelligent client. How do we engage with the industry? What is best practice? Where can we drive more efficiency into what we do? We as end users need to get better organised. We need good metrics, need to demonstrate alignment with the organisations we support and understand how the business works. Also we need to think of the industry as part of the supply chain and manage it accordingly to get the best solutions.

As stewards of the built environment we need to drive efficiency into the system in a better, smarter, faster way while doing so in a much more sustainable manner. We owe it to the generations that follow us to stop the talking and to take action now.

I hope Tuesday’s discussion prompted some in the audience to consider a new perspective.

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