Welcome to the first in a monthly series of audio and written discussions around the rapid and necessary transformation taking place in the built environment. Real Estate Redefined looks at why we need to change the way we think, talk and write about real estate if we want it to become more diverse and inclusive, be perceived in a better light and be taken more seriously by the powers that be in government. Here, James Raynor, chief executive of Grosvenor Property UK, tells us why the business refuses to accept the moniker “landlord”.
There’s a Dickensian pastiche of a landlord – bloated, suited and booted raking in money from his subjects. The modern caricature of a commercial landlord during the pandemic wasn’t much better. While we contributed more to small business survival than possibly any other industry, there were pockets that failed to act with integrity, and we were seen as fair game by many.
When I became chief executive of Grosvenor in February 2020, I already knew that we had to turn the concept of a landlord on its head, from an arm’s length, transactional (and often adversarial) relationship to one of partnership. Three years ago, I’d probably have been laughed out of the room. But now people are taking notice; and oddly the pandemic made this easier to achieve.
Successful places
So, if we aren’t a landlord, what are we? Do we still have properties, and do we still let them? Yes. But we’re now providing more than just a space to put products or people. We’re creating a service that is an essential part of a business’s supply chain and acknowledges its role in making places successful.
Just taking Mayfair and Belgravia, we support around 500 retail and hospitality companies, the majority of which are independents. The fortunes of our respective businesses are ultimately intertwined, and this is the starting point for how we build our relationship with them.
Across lockdowns we supported occupiers with rent waivers and innovated to bring footfall to streets on reopening, increasing our marketing budget and funding a month-long extension of Eat Out to Help Out, which brought 56,000 diners and shoppers to occupiers.
But we knew there is more to a partnership than propping one side up. To provide effective long-term support, removing pain points and barriers to success, we sought to build a closer understanding. There was an immediate and positive reaction to this approach.
Since then, we have not only made a lease so simple it doesn’t require negotiation, we have also invested directly in occupier expansion through a UK-first Tenant Investment Fund.
Green goals
Enabling commercial occupiers to meet their environmental goals has also been a big area of collaboration. More than 200 are already on a green lease, meaning they run their premises on renewable energy, share consumption data and consolidate deliveries and waste collection. This is a significant win for an initiative launched in lockdown when many businesses were more focused on short-term survival.
Taking a personal approach, understanding businesses better and putting skin in the game has proven to be a strong formula. We have more two-way dialogue; we are providing better services and are able to build fruitful connections between occupiers.
The proof of this concept is out on the streets. When the pandemic took hold, our ambition was to have the most vibrant destinations on reopening. With retail vacancy hovering around 3% at the year end, our long-term approach has helped us protect the health of the brands in our places and deliver consistently high footfall versus competitor streets. The same is true at Liverpool One, where we are a co-investor and manager.
And we are seeing continued demand for space and confidence in the future of the West End. In Mayfair, Chantelle Nicholson will soon open a sustainable restaurant with us as a design and fit-out partner, and Inception Group has started work on its latest iteration of Mr Fogg’s cocktail bars, backed by our Tenant Investment Fund.
What’s next? Well, that would be telling. However, we won’t let up on this approach until we know that the choice of us as a partner is as important to our occupiers as their location, connectivity and rent.
