7 Jun 2010
Policy area: Town centre & Retail
The UK real estate sector will emerge fitter and stronger from the recession according to senior figures due to speak at the British Property Federation’s annual conference on 8 June at the QEII Exhibition Centre in Westminster.
Chiefs from Segro, MEPC and JD Sports will join senior executives from the BBC, Lend Lease, Heron,
Eurohypo, Hermes and British Land on a variety of panels through the half-day conference.
Just as the country’s political system has been in a state of flux, so has the relationship between landlords and tenants, with the downturn turning it into a buyers’ market. Landlords, who were accused of levying unfair rents on tenants who signed them freely in the boom years, have demonstrated increased flexibility. Leading figures within the industry, such as SEGRO chief executive Ian Coull, have said that the focus has to be on customer service.
Liz Peace, chief executive of the BPF, said: “For the big property firms, the last year has been about proving they have weathered the storm and winning back the confidence of investors. But while City real estate has bounced back, there are real problems across the country with battered high streets and secondary offices finding it hard to find new tenants.”
Ian Coull, chief executive of Segro, said: “Our biggest challenge has been to reduce voids and keep our existing tenants in place. We do that by listening to them, working with them and responding to their needs. Shortening lease lengths and downward pressure on rents has really hit the industrial sector and while we’re not out of the woods yet, we believe that the industry that emerges from this downturn will be far fitter and stronger than the one that went into it.”
Rick de Blaby, chief executive of MEPC, said: “With fragile growth in the economy and the risks posed by large cuts in spending, levels of employment might still fall further and that translates into lower overall occupational demand. All property owners are going to have to sharpen up their proposition to occupiers, be they existing or prospective, in terms of service, transparency, building flexibility and lease flexibility if they are to preserve and enhance their revenues.
“Imperfections in the market will always exist and clearly City offices are enjoying more buoyancy, but most other markets will be characterised by a sharp contrast between the availability of good space from secondary, for some time to come.”
Peter Cowgill, chairman, JD Sports, said: “We have all been hit by recession and the increased amount of dialogue between landlords and tenants is welcome. There are still big issues to overcome however, and the raft of CVAs and pre-pack administrations that have allowed failing businesses to be propped up is scandalous. It’s vital that we have a level playing field on the high street and that firms aren’t rewarded for poor management or bad deals with rent cuts and cash-backs.”