We are often very quick to judge. Take the World Cup in Russia: British travelling support was lower than usual. This has got nothing to do with our views on football or the national team. We simply thought there would be trouble, so we steered clear, writes Guy Grainger, EMEA chief executive at JLL.
As it happens, the Russians were exemplary hosts. I suppose we should have expected more – as a top-down organisation, Russia can certainly mobilise behind its leader’s vision. And, in this instance, it was an invitation for a world audience to experience Russia.
I was in Moscow in June, at a time when international relations with the UK were at their worst since the Cold War. But the reality in Moscow is very different from the perception. It’s a huge metropolis (much bigger than London!) that is very internationalised – even cosmopolitan in parts.
Yet, there is one area where Russia has not reached modern standards… transparency. For example:
- market data is not always up to international standards
- the legal system can be opaque
- there are frequent discrepancies between regulatory standards and actual enforcement
This is still a massive disappointment for anyone trying to do business in Russia, particularly in real estate, and it needs to be a lesson for us all.
In contrast, the UK has been a leader in transparency for decades. In addition to having a respected legal framework, we have codes of conduct that are equally respected. But there is a danger that our UK real estate industry may take it for granted and become complacent. I fear that the sustained period of UK growth could lead to real estate transactional processes defaulting to historical standards and innovation not being fully embraced. Hence, to the outsider, it can still appear to be a slow business that operates in a clique.
As we position ourselves for global trade, we need to become even more transparent – right down to the bidding process. We operate relatively free from regulation, and the arrival of GDPR has taught most of us that we have very poor control of our data and processes. That’s because we don’t like to think of this as a process business – it’s a “people business”. The sooner we admit that it is both, the sooner we will improve the way we work.
Pushing for a more transparent real estate market also raises the profile of our profession. The leaks from the Paradise Papers and Panama Papers rightly shone a light on just how much high-value real estate is owned by secretive offshore companies. So, let’s see what we can do to help.
Let’s lobby law-makers to raise regulatory standards around money laundering, client confidentiality and old-fashioned bidding processes. Let’s embrace technology, so we can better collect and share market data. Let’s work with land registries to qualify the information they hold. And let’s put it into perspective: in the UK, we are doing great (and legislation such as our proposed beneficial ownership register goes further), but we can do even better.
Back to the football. Russia looked like a mature, well-organised nation in hosting the World Cup event but it’s not the same in real estate. It looks like until Russia hosts the Property World Cup, it will not be able to compete at the top table in terms of international real estate. Let’s make sure the UK does not slip into any bad habits.
