This is a great article from one of our partners in the UK, Nick McCalmont Woods.
Michael Gove is no fan of experts. He told us so during the EU-referendum campaign, although to be fair he was interrupted mid-sentence. He had been trying to say “I think the people of this country have had enough of experts from organisations with acronyms saying that they know what is best and getting it consistently wrong.” He could also have been talking about the property services industry given its penchant for acronyms although in this instance he was in fact referring to the IFS, CBI, NHS and TUC having been told that the leaders of all the organisations named disagreed with the then Justice Secretary about Brexit. Now that the UK general election campaign is under way I suspect we are going to hear a lot more about experts in the run up to June 8th, 2017.
Service sectors dominate the UK economy contributing around 78% of GDP with the financial services industry being of particular importance and with London still the world’s largest international financial centre. So it is understandable that businesses operating within the professional services arena should wish to be portrayed as experts in their particular field and this got me thinking, just what constitutes an expert?
The Cambridge English Dictionary definition of an expert is “a person with a high level of knowledge or skill relating to a particular subject or activity.” I am fortunate to have gained a huge breadth of experience from working at the world’s largest (at the time) real estate consultancy in Jones Lang Wootton for 16 years, followed by 7-years at a mid-sized UK business in GVA before running my own niche tenant representation business for almost 10-years now. Of course even a newly formed business start-up can be expert if the partners, directors, members and staff are all sufficiently experienced, practised, qualified, knowledgeable and specialist and yet too few are. My formative experience proved invaluable since only by serving an appropriate ‘apprenticeship’ with sufficient time invested in learning and experiencing the workings of the property industry was it possible subsequently to specialise in a particular discipline, in my case commercial office agency and tenant representation, and move forward with confidence through the ups and downs of numerous property cycles.
McCalmont-Woods Real Estate LLP was established in Q1 2008 and initially occupied space on the 37th floor of One Canada Square in Canary Wharf. By Q2 the UK had entered its longest ever recession and in Q3 Lehman Bros collapsed resulting in 5,000 staff losing their jobs in Canary Wharf. As firms sought to weather the global recession and address various issues impacting the professional services sector (including conflicts of interest and increased regulation) the real estate sector witnessed a series of high profile corporate mergers and acquisitions culminating in Deloitte’s purchase of Drivers Jonas in 2010. Yet only six years later as reported by EGi News (April 16th, 2016), Deloitte had agreed to offload the bulk of its transactional business causing Senior Real Estate Partner, Nigel Shilton to comment “If you look at the transactional side of things and the consolidation in the market, it is not getting any easier to compete. You need to either be niche and boutique or large and global.” Now in our 10th year of business McCalmont-Woods is proud to be an independent niche real estate agency specialising in tenant representation.
Nowadays of course, everyone’s an expert. How do we know this? Well because the ‘experts’ tell us that they are and it says so on their corporate websites! Of course it is not a pre-requisite that real estate advisors need be expert or even qualified members of the RICS, the property profession’s governing body for them to carry out business in the UK’s commercial office market. This said most sane people would likely steer clear of unqualified and inexperienced doctors and dentists. Neither would they rely on unqualified accountants to manage their tax affairs nor appoint inexperienced lawyers to negotiate important business contracts. So why apply a different standard to commercial real estate?
The Tenant Representation Advisors Society was co-founded by a group of six agents in 2006 to represent the growing number of tenant specialists in the London and other UK office markets and has since grown into a formally constituted professional association with over 100 members from predominantly niche and boutique small businesses. TRADS has evolved to provide members with a training, education and networking forum intended to promote excellence in tenant representation leading Brookfield Property Partners Head of Leasing – UK Office Division, Martin Wallace to comment “Any organisation that promotes excellence for its advisory members, particularly when they operate in a specialist area such as tenant representation, is of interest to us not only as a landlord, investor, developer but also as a participant in the wider property market place. Brookfield has significant engagement with the agency community and the tenant representation specialists in particular and therefore we are happy to support and promote TRADS as the dedicated forum which caters for this discipline.”
The 9th TRADS CPD seminar saw a panel of landlords with representatives from AXA Real Estate, Broadgate Estates, Brookfield and Oxford Properties come together on April, 5th in Oxford Properties’ stunning 29th floor offices in The Leadenhall Building, 122 Leadenhall Street, EC3 to debate with over 60 TRADS members and guests how landlords perceive the Landlord and Tenant relationship, and what tenant representation advisors might do to enhance and change that relationship for the better. One of the great advantages of small businesses is that they tend to be more flexible and quick to change than larger corporates.
A vibrant small and medium-sized enterprise sector is a vital ingredient for a healthy market economy and according to the FSB, small businesses accounted for 99.3% of all private sector businesses in the UK at the start of 2016 of which 99.9% were small or medium sized (SMEs). Total employment in SMEs was 15.7 million; 60% of all private sector employment in the UK. And since the combined annual turnover of SMEs was reported to be £1.8 trillion, equivalent to 47% of all private sector turnover in the UK, we can perhaps surmise that there will indeed be a role for ‘real property’ experts in the foreseeable future, either with a global outlook or local niche perspective or even both!