Listening & talking is key to UK commercial real estate emerging stronger and fitter from recession

Senior executives from Segro, MEPC, Lend Lease, Heron, Eurohypo, Hermes and British Land told the British Property Federation’s annual conference in London that a focus on customer service will help forge strong relationships.
 
‘For the big property firms, the last year has been about proving they have weathered the storm and winning back the confidence of investors. But while City real estate has bounced back, there are real problems across the country with battered high streets and secondary offices finding it hard to find new tenants,’ said Liz Peace, chief executive of the BPF
 
Ian Coull, chief executive of Segro, believes that the biggest challenge has been to reduce voids and keep existing tenants in place. ‘We do that by listening to them, working with them and responding to their needs. Shortening lease lengths and downward pressure on rents has really hit the industrial sector and while we’re not out of the woods yet, we believe that the industry that emerges from this downturn will be far fitter and stronger than the one that went into it,’ he said.
 
According to Rick de Blaby, chief executive of MEPC, the fragile recovery and unemployment levels could all still have an impact. ‘With fragile growth in the economy and the risks posed by large cuts in spending, levels of employment might still fall further and that translates into lower overall occupational demand. All property owners are going to have to sharpen up their proposition to occupiers, be they existing or prospective, in terms of service, transparency, building flexibility and lease flexibility if they are to preserve and enhance their revenues,’ he explained.
 
‘Imperfections in the market will always exist and clearly City offices are enjoying more buoyancy, but most other markets will be characterised by a sharp contrast between the availability of good space from secondary, for some time to come,’ he added.
 
Peter Cowgill, chairman of JD Sports, said that the retail sector will benefit from clear communication. ‘We have all been hit by recession and the increased amount of dialogue between landlords and tenants is welcome. There are still big issues to overcome however, and the raft of CVAs and pre-pack administrations that have allowed failing businesses to be propped up is scandalous. It’s vital that we have a level playing field on the high street and that firms aren’t rewarded for poor management or bad deals with rent cuts and cash-backs,’ he added.