EDITOR’S COMMENT I am itching to write about what we learned from the EG Future Leaders at their showcase last week on this page today, but I mustn’t. I’m going to save that for next week’s issue when those of you who weren’t able to make it will be able to watch and read about what really was a phenomenal evening of learning.
Instead, I am going to talk about present and, perhaps, past leaders.
Now, I am not averse to getting on my high horse about this industry’s need to attract new talent, to look outside of the traditional hunting grounds and find a fresh view on what real estate can do and how businesses should be run. I believe that. Entirely.
However, I also worry that we are creating an environment that potentially excludes what I have, probably unfairly, called the “Old Guard” at a time when the industry really needs learned and lived experiences.
A recession is an inevitability. Great difficulties are coming around the corner. The cost of living will continue to rise. Inflation, once up, is hard to rapidly bring back down. Interest rates will continue to rise. All of this will make life difficult for many. In their private lives and in business too. We’ve seen a trickle of receiverships. There will be more. Pain is coming.
When times are difficult, we need experience around us. We need those who have been through it before, probably several times. Some will have failed and some will have made it through. Some will have experienced both. But all will have learned. They will understand when to panic and when not to panic. When to take that risk and when to quietly let that opportunity slip.
This is the stuff that a computer can’t teach you. The data might be able to show you some analysis, some cool graphs and may even be able to predict some outcomes. But it won’t be able to tell you what it is like. What it really feels like to run a business through a recession, to manage not just a portfolio but a team as well.
And that’s why I was a little sad this week to read that Palace Capital boss Neil Sinclair was stepping down with immediate effect. Officially, the line is that it is “the right time” for him to be stepping down. He has just delivered a set of strong results for the company so why not bow out on a high, 12 years after founding the regional investor?
But if you’ve ever met or chatted to Sinclair, you will know bowing out isn’t really his style. Whenever I’ve spoken to him, he’s been so passionate about Palace Capital and the investment it is helping to deliver in the regions. It was doing its bit for levelling up – albeit not in the most massive way – long before we even knew what levelling up was.
Sinclair is one of the old-school property people who new-school people need to learn from. He would visit a place. He would see what it was like. He would experience the real estate before making a decision. Sure, tech and data can help us with those decisions now, but there is a special skill in really understanding the impact of real estate (on your bottom line and on its community) that only comes from experiencing it.
It doesn’t take a genius to put the pieces of the puzzle together and see that Sinclair has stepped down following shareholder pressure for a shake-up of the business. Shareholders who wanted to see a change at the business to offset its “average performance”.
Palace’s results, released this week, showed income from property up by 27.5% to £19m, with IFRS profit before tax at £24.6m, up from a £5.5m loss last year. Adjusted profit before tax increased by 4% to £7.8m. Is that average? It doesn’t sound it to me but I do worry that if we don’t invest in our current leaders and those who have been through it all before, just as much as we are in our future leaders, if we don’t bring those groups together to learn from each other, this industry’s future will be distinctly average.
To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews
