One of the very best things about being editor of the EG is the opportunity gifted to you every week to have a little rant – sometimes on behalf of the industry, sometimes at it.
The platform that the Editor’s Comment – or Leader as it is known within the EG office – provides is an honour and a privilege. It must be used well. Sometimes the words flow freely, sometimes knowing what to say and trying really hard not to look too silly is really hard. At times like that you’re always grateful for your infinitely talented deputy editor, who picks up the mantle and delivers something much more coherent.
But what does a year’s worth of Editor’s Comments tell us about the big issues EG saw facing the industry in 2024? Let’s take a look.
January
The year started with Team EG promising to both challenge and champion the real estate sector in 2024, a promise I’m happy to say we delivered on.
Modular was on our minds too as yet more and more companies failed. We questioned whether 2024 should be the year that the industry gave up on trying to deliver a mass modular housing industry and instead took all the money it had pumped into modular and refocused it on upskilling planning departments and getting more people into the construction sector.
As temperatures plummeted, we challenged the industry to help those without roofs over their heads by offing up empty spaces in TfL zones 1 and 2. Many of you stepped up. Thank you.
EG’s real estate resolutions for the 2024
Where real estate wins at diversity
February
February began with a bit of a kicking for Michael Gove and his latest missive to encourage local authorities to sell off their assets to plug funding gaps. That suggestion felt a bit short-sighted to us and yet another example of how the government didn’t quite understand how vital land, development and the built environment can be in delivering economic growth. It is an asset class with value. What Gove should have suggested was better partnership, we said.
Planning is a theme that came up in a number of Editor’s Comments in 2024 (and in many years gone past). This month we were calling for commonsense in the planning system and for planning committee members to look to the experts for advice, not to always follow the rules.
“This goes to the nub of the problem with our planning system,” we wrote. “Multiple reforms, reams of paperwork, condition after condition have taken the human out of the process. No, not even the human. It has taken the brains out of planning. Planning today is all about ticking boxes and following rules. Computer says no.”
Fast forward to the end of the year and it feels like someone might have been listening. New requirements that planning committee members are properly educated, could bring commonsense and reasoning back to our planning meetings. Perhaps.
We championed the industry again as I took to Twitter to suggest that Michael Gove perhaps shouldn’t have called property professionals “bandits”, only to be met with some exceptional trolling. It was a reminder that there is still so much work to be done to change the perception of real estate and what it actually does.
And the flurry of M&A activity that would punctuate so much of 2024 properly began…
It’s time to bring a little common sense back to planning
Property’s new purpose: factories of improved social outcomes
Forget capital markets, M&A is where the action is
March
Uh oh. Budget time. More devolution (to Surrey!), more levelling up funding (to Canary Wharf!), investment into life sciences, tax breaks for the film industry to help boost the booming studio sector in the UK, oh my!
It was the final Budget from the Conservatives and one that followed the tradition of having very little that would help our sector.
But who cares about a pantomime Budget when the sun is shining down in Cannes and the property sector has once again returned to MIPIM – albeit with a slightly different tone. Less deals chat, more ESG and EDI conversations, a more diverse group of attendees. Was it the start of a new MIPIM?
ESG continues to be a major talking point and challenge for the industry, but fears persisted that while investors and developers might be taking it seriously, office occupiers weren’t with location, not sustainability, still driving decisions.
And planning was back in the limelight as the usually polite and well-tempered Tim Roberts, chief executive of Henry Boot, let rip at the government’s “consistent failure” to reform the planning system.
“The government has consistently failed to carry out much-needed reform of what, I am afraid to say, is an increasingly dysfunctional and under-resourced planning system,” he said. “The delays and uncertainties caused by planning not only affect housing and commercial property, but also investment and productivity in the UK.”
Fast forward a few months, and a new government was quick to launch that “much-needed reform”.
A Budget for business? Oh no it isn’t
A change of theme at MIPIM as those of Cannes do
Getting ESG on occupiers’ agenda – regardless of their size
Can the planning system ever be unstuck?
April
As we entered into Q2 of 2024, the team at EG was in a reflective mood, wondering if the industry was progressing or slipping backwards.
The pondering was prompted by an e-mail from Tim Lowe, the former Knight Frank graduate who now runs property guardian business Lowe Group. His e-mail was a reminder that it had been a decade since we ran an experiment to see if he could live in zone 2 of London paying a monthly rent of £500, including bills.
Affordability today – particularly in our housing market – remains even more challenging than 10 years ago. Will the efforts from the new Labour government fix that? That will need to be a comment delivered in 2029, I think.
Progress – or lack thereof – continued as a theme further into April as gender pay gap figures for the real estate sector left little to be proud of. Bonus gaps were pretty eye-watering, with almost 60% of the 22 leading real estate firm’s EG looked at reporting an increase in their bonus gaps year-on-year. And among those that reported an increase, the move outwards averaged 12.2 percentage points. For those that improved the gap, the average nudge in was 7.6 percentage points, leaving a 4.6pp delta.
EG managed to make it to Q2 before the big debate over WFH and office-based working hit the Editor’s Comment section. Deputy editor Tim Burke sparked a spat on LinkedIn as the WFH warriors claimed no one wanted to work in an office and that encouraging people back was being driven entirely by developers and speculators. Fair point. Of course, an office developer or owner doesn’t want its office empty, but if Team EG is anything to go by, there’s plenty of people out there who actually like being with their colleagues and collaborating.
And signs of the bottom of the market began to appear with investment giant Blackstone saying it was feeling confident enough to get investing again.
A decade of development or a push back on progress?
The solution to equity lies in capital markets
The WFH versus the office debate isn’t done yet
Waiting for the all-clear? There’s no time
May
The UK and Europe were on an upward trajectory and, for the first time in a long time, were being talked about as being stronger than the US.
Trading figures from Grosvenor and Cushman & Wakefield, both published during the first week of May, revealed strong performances from their UK and/or EMEA businesses. And both had the US to blame for dragging down their figures.
For Cushman, leasing activity in Europe was a highlight in the first quarter of the year, helping the region to post the highest year-on-year revenue growth across the business, while the Americas reported a year-on-year decline in revenue of 6% and a loss of $16.8m.
At Grosvenor, an underperformance in its Americas property business led the firm to report yet another year of falling revenue profit. The UK, on the other hand, reported an increase in revenue profit to £60.5m – up from £38.3m in 2022.
The resilience led to an influx of US investors eyeing the UK too.
Positivity continued as a flurry of Q1 figures from the top agents revealed strong increases in leasing activities, driven by the return to the office by many workers.
“We don’t have a single client that I’m aware of – and we work with the biggest tech companies, the biggest financial companies, etc – that doesn’t view their office space as a critical asset for the operations of their business,” said CBRE boss Bob Sulentic. “They’re all trying to get their people together more. They’re all trying to get people to spend more time in the office and less time at home. And they’re very focused on using those office portfolios to get that done.”
It’s not all about the return to the office in 2024 though, the big comeback story of the year has been retail.
In May, Landsec boss Mark Allan made a very vocal vote in favour of retail, stating the REIT’s conviction on prime shopping centre assets and revealing a £600m war chest to get buying. Okay, it took the firm until December to finally secure its big buy, but retail was definitely back in favour.
And, of course, a general election was called and EG returned to its championing default, asking for commercial real estate not to be overshadowed by housebuilding by the probable new party in power.
Forget the American dream, it should be the UK dream
Return to the office gives agencies reason for cheer
If we’re all in Leeds, let’s make sure we lead on real estate’s value
Why retail’s return is a lesson for all of real estate
Don’t let housing overshadow commercial real estate this Independence Day
June
Love him or loathe him, you can’t deny that Andrew Jones has had a very good run with LondonMetric. And while it would be easy to think him smug as he delivers positive set of results after positive set of results, he does provide a very good lesson in making sure that you understand the fundamentals of real estate, that you don’t get caught up (too much) in the ego of it, and that adding a few Warren Buffett-style quotes to your earning statements is always going to get you some decent column inches.
EG published its annual LGBTQ+ survey this month, which served as a great reminder of how far this sector has come on its diversity and inclusion journey and how far it still has to go (more on that later). EG’s professional & legal editor Jess Harrold took charge of the Editor’s Comment to remind us of the responsibility that comes with privilege. And that for those who benefit from privilege, in whatever form, we remember that it comes with a duty of allyship to those who do not.
“The P-word doesn’t have to be seen as an insult,” wrote Harrold, “It can be taken as an inspiration.”
Should we all be a little more like the Sage of Mayfair?
Why commercial real estate needs to be front and centre of the party manifestos
With privilege comes great responsibility
Is commercial real estate metamorphosing into residential?
July
Guess what? Planning is back at the top of the agenda. This time it is the rise of the corporate nimby as the greatest display of irony took place in the City of London. We utilised the Editor’s Comment to question whether corporate nimbyism would become development’s new plague as a number of owners and occupiers of some of the very many tall buildings in the Square Mile objected to a tall building being built in the Square Mile. This was the planning meeting for 1 Undershaft, EC3, the former headquarters of Aviva, which is nestled in the City’s tall buildings cluster with the Gherkin, the Lloyd’s building, the Cheesegrater and others.
Perennial Group and Stanhope’s plans to turn the 380,000 sq ft, 28-storey now vacant office block into a 74-storey, 1.6m sq ft tower had been recommended for approval but committee was forced to defer its decision after a flurry of last-minute objections.
It was a farce and in December the plans finally got approved.
Labour won the election and the real estate industry responded with optimism. A change in government would boost investor appetite, they said, stability is back, they cheered, the planning process is finally going to get unblocked, they hoped. “The absolute shitshow” of UK politics has come to an end, they swore. Hmmm.
And this EG editor took advantage of a killer quote from one of EG’s brilliant EG Interviews to talk about the love of my dog, Fozzie.
Custodian Property Income REIT boss Richard Shepherd-Cross, fresh from losing out on a £1bn proposed merger with Abrdn Property Income Trust, compared himself with a terrier that had been bitten by a rat. Angry and determined to make amends. It was a great metaphor for the resilience of the industry. It doesn’t just lie down and cry about its wounds, it gives them a lick, and then chases down that rat (aka deal) until it gets it done.
Could corporate nimbyism be development’s new plague?
All change for CRE has Labour recognises skin in the game
Hope and optimism in Labour’s first weeks in power
Is it time for real estate to be more terrier?
August
A big EG Interview with Rapleys reminded us to never ignore the quiet ones in the room. Big and brash may grab the headlines from time to time, but there is power in those who just quietly get on with business.
There’s an excellent leadership lesson to take away from the interview too. We all know that money talks, that deals are sexy and that income matters, but none of that matters if you can’t motivate your people to want to deliver. To care about what they do.
As our new government started to settle into power and appoint new ministers – including one Mr James Timpson as prisons minister – EG flipped into championing mode again and asked if property needed its own Timpson.
In Timpson, Labour had someone who understands prisons and offenders and someone who is somewhat apolitical – he had been advising the previous Conservative administration. An expert, focused on the issue, not on political gain. It’s a novel concept, but I like it.
We asked what that could look like for real estate. Would a property strategy minister be able to take a wider, longer-term look at both public sector property and the role the private sector plays in delivering a built environment for the benefit of the UK populace, the economy and their own bottom lines?
We asked you on LinkedIn and a massive 88% of you thought Labour should create the role. In December, we’re still waiting. But never, say never, eh?
And, I got on my high horse a little bit and got purposely provocative when a CBRE survey of Gen Z and Millennials revealed that 30% of women in those groups didn’t have leadership aspirations. That figure is fine, but what really grated was that, for men, that figure was just 7%. How could there still be this massive gap between men and women and the desire to want to lead? It felt like all the hard work we’d been trying to do to equalise the workplace, to show women and girls that they can lead, was wasted.
It was a reminder that while industries, ours and others, have come a long way on their EDI journeys there is still a long way to go – more on that later.
People, not profit will lead property to prosper
Does real estate need its own James Timpson?
Why real estate needs to be a leader in showing young women they can be the boss
September
M&A was back in the headlines as more mid-cap listed real estate entities got taken over and taken private.
Deputy editor Tim Burke dove into the pros and cons of being a public REIT and the growing calls from those operating in that market for less of a focus on NAV and more of a focus on earnings.
Questions about the point of being listed on the UK stock exchange continued further into September, with US-based investment house Buckley Capital Management urging Mark Dixon’s IWG to quit the London Stock Exchange and list in America.
A US listing, said Buckley, would expose IWG to a new and more liquid market, with “investors who have greater appreciation of its leverage levels and business model”.
“The more efficient capital market in the US can help the company realise intrinsic value in a timelier manner,” added Buckley, “which the UK market has failed to do over the last five years.”
IWG, for now, remains on the LSE.
Nearly six months on from announcing plans to invest as much as £600m into UK prime shopping centres, Landsec had still not managed to secure a deal. This was despite being runner-up on several chunky lots. With it always being the bridesmaid, never the bride, we proposed a different option. Merge with Hammerson. With no Value Retail causing headaches at Hammerson and a decent portfolio of prime shopping centres – and that discount to NAV that every listed real estate firm is suffering from – surely a merger makes sense.
No announcement yet but watch this space.
Risks versus reward in the REIT regime
Surely, we should be fighting for businesses to remain in the UK?
Is it time for a Landsec/Hammerson merger?
What will ISG’s collapse mean for development viability?
October
Fresh from our latest EG Future Leaders grand finale, we at EG were in a positive mood about the future of the market and very, very much locked in our championing the sector mode.
The EG Future Leaders showcased how development can create better lives for people, can create a place where a kid doesn’t have to do his homework at a desk next to a wall covered in black mould. They demonstrated how in real estate, we have the ability to create places where people can come together, find peace and happiness and combat loneliness, how we have the ability to showcase personal strengths, to build powerful teams that can collaborate to make those changes, provided we make this industry open. And how in real estate, we have the power to deliver accessible, inclusive and safe places and through better use of data and technology, we have the tools to do it right at our fingertips.
How can you not feel positive for the future of real estate after all that?
Positivity continued as real estate professionals gathered in Munich for Expo Real. Stock was coming back to market, that ever-looming wall of capital was getting closer, and investors and agents alike were starting to feel more like we were actually going to survive to 25.
We rounded off the month, preparing ourselves for new chancellor Rachel Reeves’ first Budget. None of us were expecting good things. None of us expecting real estate to get the kudos we all know it deserves, but EG called on the industry to rally itself and regardless of what may befall it, to crack on and do what it does best – to create, to deliver and to lead the way.
Change isn’t just coming in real estate, it’s here
Canapés, FOMO and hopes for Q4
Can real estate be the UK’s dot-joiner?
Why demand when we should just do?
November
The BPF, AREF and IPF announced plans to potentially merge the three industry bodies to finally create a powerful, unified voice for real estate. We at EG welcomed the move but questioned whether more was needed. If we really want one voice, why not go even further – roll in the REVO, BCO, CREFC, even the RICS?
Imagine the power that could have, we said. A proper, industry-wide, properly funded body with meaningful membership fees, a fully invested, diverse (and inclusive) membership body that agrees on what is needed to continue to drive this industry forward. That could be immense.
Talks are continuing on the merger, with a vote by membership bodies expected to take place next year.
Turns out that I was probably a bit hard on Landsec this year. Boss Mark Allan took another beating in the Editor’s Comment for still not having delivered on his much talked about conviction on prime shopping centres. He’d not bought anything of scale while his traditional REIT rival British Land, had dropped more than £700m on its conviction call of retail parks.
BL got bashed for being boring, but it had delivered. Landsec got there in the end of course, snapping up a 92% stake in the 1.7m sq ft Liverpool One in mid-December for £490m.
Better together: what a united real estate could really mean?
Will it be all change at Homes England?
Why completion, not conviction, matters?
Male, pale and privileged: welcome to real estate
December
A flurry of announcements from government throughout December have shown that Labour is intent on hitting its 1.5m new homes target. What all of the announcements – all tweaks to the planning system in some way, shape or form – have failed to consider is viability. Making getting planning easier doesn’t help make it easier to build. Barriers still exist and until property can change its perception of not needing financial help (you’re all a bunch of rich, fat cats, remember), the biggest of them – viability – is likely to remain.
Fixing viability, not the planning system, is key to deliver on homes targets
2024: A roller coaster year for real estate
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