At the coalface with developers

I’ve been reflecting on the last chapter as it comes to a close. Two years working on some of London’s newest places and spaces have characteristically passed in a blur. It’s also been an incredibly helpful time at the sharp edge with some of the developers changing the face of our capital.

It’s impossible not to see London’s polycentricity up close, whether in mobilising a commercial tower in the City, or advising schemes out east at the Thames Barrier and Royal Albert Docks and over to the West with Television Centre, White City Place and South West with Battersea Power Station’s first phase. Each submarket is so very different, but unified with the singular challenge of weaving new places into the community around them, and winning the hearts within them. Each scheme brings thoughts for London’s mobilisation specialists to reflect on.

Residential has become the belle of the ball in any mixed use scheme. If prime isn’t challenging enough in terms of service expectation and amenity, super prime isn’t for the fainthearted. Truly honest reflection is needed on whether anyone other than very few specialists can envisage and meet the needs of UHNW’s with lifestyles so alien from anything we can recognise. How can it be logical to apply the standard residential management model and service charge legislation when it barely works for the remainder of the residential market?

Each developer’s approach to practical completion and the process of building acceptance has always been more art than science. With recent projects, I’ve seen the risk transfer from developer to managing agent is noticeably worsening.  The main culprit is the close out process.  As completions are taken earlier, the programme will still have some way to go and this can sit uncomfortably alongside the usual defect management and escalation process post PC. In so doing, the managing agent’s site team are managing the Principal Contractor, trades and intensive programmes through close out and after PC whilst mobilising the scheme. For the right skill set, there’s a service line here, but I fear too many agents are failing to properly support their site teams, and failing to challenge their client’s model with the unintended consequence of compromising contractual recourse. The dialogue needs to shift with managing agents pro-actively structuring resourced solutions with their clients.  

Developers of estates have become estate managers. This may sound obvious, but when building out over a long period, with residential creating value first, the public realm, infrastructure and commercial uses need management. In large scale, phased schemes, management will be sustained over long and sustained periods of time against the backdrop of a shifting exit strategy. With these developers, the infrastructure for estate management can be overlooked. Similarly, whilst the holding costs will pale into insignificance next to development costs, unless they have been realistically budgeted, underinvestment will compromise the vision for set up, placemaking and increasingly, aspirations on social value.  No one will get these budgets right first off. It takes a sustained approach which looks beyond the immediate needs of the programme, reflects on various leasing scenarios, accurately assesses void costs, looks at alternative income streams and is realistic about the costs of placemaking. With placemaking alone, the days of thinking that can be achieved with 15% from the service charge and a bit of match funding have long gone.

And on social value.  Lest anyone think it’s the new word for placemaking it’s not. Local authorities have always set expectations of developers when bidding, and when got right, we have seen that redevelopment is now the greatest driver for supporting outcomes of employment, education and economic opportunity. But with social divides, tribalism and economic inequity worsening to an extent I’ve never felt before, community cohesion can be helped enormously by creating and activating accessible, relevant places for all. Developers who put social value first, rather than tacked on to the end as a subset of placemaking objectives are transforming the way. Managing agents need to look at how every aspect of the estate and property management supports this strategy. For me, getting this right offers the property management industry a radical new purpose as it brings place, property and people together to transform different forms of value.

The joy of developer clients is they are more naturally disposed to rethink the model provided it supports value creation and brand promise. Looking back over the last couple of years, I’ve realised how fortunate I’ve been in pushing these debates on to the agenda with those shaping Emerging London. And thank you to those who continue to invest in relationships with their managing agents; you’ll have discovered the joy of trusted business advisors.