Newsroom

MIPIM 2011: Property industry faces greater regulation and “twitter revolution” among occupiers, predict industry experts

Greater regulation from Europe and increasingly empowered and well informed occupiers as a result of social media are just two of the issues facing the UK property industry, it will be revealed today at the MIPIM property convention in Cannes⁽¹⁾.

The event run the British Property Federation (BPF) and London consultancy RealService, will hear some of the property industry’s leading figures spell out their vision for what the property industry will look like in the year 2020.

With the property industry finally picking up post recession, albeit slowly, new ways of doing business are emerging and inevitably the internet and social media will take centre stage over the coming decade.

Neil Young, CEO of the Young Group, feels “occupiers will continue to become more knowledgeable and empowered as information becomes increasingly accessible and more easily shared through social media, something that the sector as a whole has been slow to adopt.  I’d like to think that over the next decade property professionals can not only catch up, but also lead the way with innovative use of technology to drive a better more transparent experience for customers and closer, flexible relationships with landlords and occupiers.”

Howard Morgan, managing director of RealService, added: “The property industry’s customers will also be more knowledgeable with information at their finger tips to help them make informed decisions about which suppliers are best and offer consistently high levels of customer service.”

Industry experts will also highlight that the UK property industry needs to be increasingly wary of the growing influence of EU legislation over the coming decade, which threatens to establish a stranglehold.

Liz Peace, chief executive of the British Property Federation, commented: “When Brussels first turned its attention to the property industry, it focused on energy and environmental matters with the odd foray into VAT. However there is a worrying trend of EU legislation catching the UK property industry in its regulatory net.

“The trouble with the legislation, such as the Alternative Investment Fund Managers Directive⁽²⁾, is that it is not directed initially at the real estate industry but because we are now regarded as an integral part of the capital markets it is very difficult to persuade Brussels law makers that we should not be lumped in with the rest of the investment community.

“Trying to get across to EU officials that investing in property involves more that an act of pure financial speculation and actually requires serious ‘production’ and management of the assets we own is proving challenging. The penalty if we fail to do so by 2020 could be a whole raft of suffocating legislation.”

Martin Samworth, Managing Director of CB Richard Ellis, added: “As a consequence of regulatory control, which is set to increase in the near future, there will be a better understanding and more effective management of risk. Capital sources and its deployment will therefore be influenced by investors’ appetite towards risk and the regulatory framework. The latter will have a direct impact on how real estate is funded. For example, the consequences of Basel III and Solvency II will add a new dimension and focus, particularly around debt.”

ENDs

For further information or to organise an interview please contact:

Patrick Clift, Media and Public Affairs Manager, British Property Federation, on 07834 439 505, or pclift@bpf.org.uk

Paul Sweeney, Media Assistant, British Property Federation, psweeney@bpf.org.uk  – 020 7802 0113

Notes to Editors:

(1)    Thursday 10th March 2011 at 12.00-2.30pm in the private dining room at Le Relais des Semailles, 9 rue Saint-Antoine, Cannes

(2)    The Alternative Investment Fund Managers Directive is a proposed European Union law which will put hedge funds and private equity funds under the supervision of an EU regulatory body. These kinds of business vehicle have not been subject to the same rules to protect the investing public as mutual and pension funds. The European Parliament voted through a final text of the Directive on 11 November 2010.

Martin Samworth, Managing Director of CB Richard Ellis, commented: “The property market will have become increasingly dynamic and sophisticated as we move towards 2020. There will be a well established indirect market with good liquidity and easier access to a whole range of sectors and geographies.

“As a consequence of regulatory control, which is set to increase in the near future, there will be a better understanding and more effective management of risk. Capital sources and its deployment will therefore be influenced by investors’ appetite towards risk and the regulatory framework. The latter will have a direct impact on how real estate is funded. For example, the consequences of Basel III and Solvency II will add a new dimension and focus, particularly around debt.”

Howard Morgan, managing director of London consultancy business RealService says:  “I see a future in which the property industry will move from being self-focused to being obsessively customer-focused - or customer inspired as we like to put it – resulting in a number of property companies becoming brands or even ‘super brands’.

“Property companies will become more transparent about the way they do business and the costs of doing business with them.  Their products and services will also become more clearly defined and differentiated as opposed to an amorphous mass where one size fits all.

Morgan adds: “The property industry’s customers will also be more knowledgeable with information at their finger tips to help them make informed decisions about which suppliers are best and offer consistently high levels of customer service”.

Neil Young, CEO of the Young Group, said: “I think over the next decade, occupiers will continue to become more knowledgeable and empowered as information becomes increasingly accessible and more easily shared through social media, something that the sector as a whole has been slow to adopt.  I’d like to think that over the next decade property professionals can not only catch up, but also lead the way with innovative use of technology to drive a better more transparent experience for customers and closer, flexible relationships with landlords and occupiers.

“We’ll also see that those property companies who are not able to clearly demonstrate that they add value (whether through sharing their own knowledge and advice or providing exemplary levels of customer service) will, rightly, fall by the wayside.”

Tweet