EDITOR’S COMMENT There are dream jobs and there are nightmare jobs. And sometimes they’re the same job. Like president of the United States, or editor, or chief executive of a developer that delivers really cool buildings.
I’m kidding about editor, of course, this is always a dream job. Never, ever a nightmare.
But CEO of a listed property company, particularly a developer, in a very difficult market? That really is a tough gig.
Newly promoted boss of U+I Richard Upton has given himself 100 days to turn the loss-making company around following the shock departure of Matthew Weiner and chief financial and operating officer Marcus Shepherd this week. A review of the company’s board and an overhead reduction programme that has already seen employee numbers fall by 41% means it is pretty likely they won’t be the last departures from the developer.
U+I has been a bit of a poster child for development over recent years. It was the bringing together of two successful businesses – Development Securities, which back in the day provided London with some of its flagship offices, such as One Curzon Street in the heart of Mayfair, and Cathedral Group, Upton’s firm, which was once hailed as one of the most creative and innovate developers in Greater London and the South East.
The firm put creativity, collaboration, community and design at the centre of what it is. It has some amazing and beautiful projects on its books. It has an enviable HQ. An office that is cool, a place where you actually want to go to work.
But Upton is going to have to make some hard decisions. Some of the very things that made U+I what it is are going to need to be pushed down the agenda in favour of financial performance. That super-cool HQ is first for the chop as a smaller team will need a smaller office, the rule will be run over the development projects, with their ability to deliver total returns the deciding factor in whether they stay or whether they go.
Will this mean that U+I’s well-meaning purpose of unlocking “value for all through regeneration, driven by a strategy focused on delivering socio-economic benefits to communities and sustained shareholder returns” might have to be rewritten slightly? With a fresh focus on those sustained shareholder returns ahead of anything else for a little while?
There’s no doubt that Upton and the team before him will have faced pressure from shareholders to reduce overheads and find income. Times are tough out there and cash is king. Development, particularly those big, shiny, flagship developments, are what makes real estate sexy, but they are also what makes real estate an easy loss-maker.
On the eve of Donald Trump’s last day in the White House I went down a YouTube-shaped rabbit hole and found myself watching the Selena Scott interview with The Donald in his real estate boom-and-bust days. He was obsessed with the sexy, with the great. There’s definitely a time for that, but it’s definitely not in a downturn.
I’m not comparing U+I to Trump here of course, but perhaps Upton, like Biden, has a few things to unravel to make U+I great again.
This week EG has launched its annual LGBTQ+ survey to understand how attitudes and actions towards LGBTQ+ people in real estate are changing. The survey takes just 10 minutes and is completely anonymous. If you can, please do fill it in and share it with your colleagues and networks. Understanding is how we make change, after all. Click here to complete the survey >>
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