Latest / Propertyshe Podcast / John Forrester

Transcript

John Forrester · Propertyshe Podcast

• 0:06
  SPEAKER_00: We are an incredible city, and that is why it remains deeply attractive.
• 0:11
  SPEAKER_00: There's still a green light from global investors too.
• 0:14
  SPEAKER_00: Would I invest in London if I could find the right asset?
• 0:17
  SPEAKER_00: Yes.
• 0:18
  SPEAKER_00: But finding that asset and having it being understood and risk-managed is getting harder, particularly in development.
• 0:30
  SPEAKER_01: Hi, I'm Susan Freeman.
• 0:32
  SPEAKER_01: Welcome back to our Property Sheet Podcast series brought to you by Mish Condoraya in association with the London Real Estate Forum, where I get to interview some of the key influencers in the world of real estate and the built environment.
• 0:45
  SPEAKER_01: Today I'm delighted to welcome John Forrester.
• 0:49
  SPEAKER_01: John was appointed as chairman of Related Argent on 1st May 2025.
• 0:54
  SPEAKER_01: This follows his appointment as a strategic advisor to the board in May 2024 to advise on and support the continued expansion and reach of the business.
• 1:05
  SPEAKER_01: John is also chairman of Innovo Real Estate Development, the development arm of international construction company Innovo.
• 1:12
  SPEAKER_01: John is a renowned senior global executive and accomplished CEO, most recently group CEO and president at Cushman and Wakefield, where he led the business for more than a decade.
• 1:24
  SPEAKER_01: Prior to that, he was Group CEO at DTZ before it merged with Cushman and Wakefield in 2015.
• 1:32
  SPEAKER_01: John brings a wealth of experience that spans all aspects of property investment, development, and management.
• 1:38
  SPEAKER_01: Over a 35-year career, he's worked on some of the most high-profile projects both in the UK and globally.
• 1:45
  SPEAKER_01: John is a Fellow of the RICS and past president of the British Council for Offices.
• 1:52
  SPEAKER_01: So now I'm very much looking forward to talking to John Forrester about his experience of leading global real estate businesses through some very turbulent times and to hear his views on the future for UK real estate development and investment.
• 2:10
  SPEAKER_01: So, John, good afternoon.
• 2:12
  SPEAKER_02: Good afternoon.
• 2:14
  SPEAKER_01: I've been uh looking forward to this conversation since the Built World Summit earlier this year, when um as a panelist you were talking about how hard it is for um investors at the moment.
• 2:28
  SPEAKER_01: We will get to talk about that during the course of this conversation.
• 2:32
  SPEAKER_01: Um, but just to start, I'm intrigued.
• 2:35
  SPEAKER_01: You've been described as a kind of fire axe behind emergency glass.
• 2:41
  SPEAKER_01: Does that sound familiar?
• 2:42
  SPEAKER_01: Somebody who's brought in when things get difficult.
• 2:45
  SPEAKER_01: I mean, is that a fair description of your management style?
• 2:50
  SPEAKER_00: I'm not sure whether it's a management style.
• 2:51
  SPEAKER_00: I think it's more a um sort of when I show up or when others feel my particular skill set.
• 2:59
  SPEAKER_00: It sounds like something from taken, doesn't it?
• 3:01
  SPEAKER_00: You know, I have a particular set of skills.
• 3:03
  SPEAKER_00: And when maybe when people value those skills more than at other times.
• 3:07
  SPEAKER_00: Historically, so from from time to time when I was on the advisory side, as in any cyclical industry, I got dragged into difficulties of an organization which weren't necessarily mine of the making, because I was just an employee.
• 3:21
  SPEAKER_00: But to get out of the spot the organizations were in, then leading a lot of people to another place was something that people felt I was capable of.
• 3:30
  SPEAKER_00: And um it'd probably nice to say in hindsight.
• 3:33
  SPEAKER_00: Maybe they were right.
• 3:34
  SPEAKER_00: Maybe I didn't feel I was at the time, but oh that it's certainly happened to me more than once since then, that's for sure.
• 3:40
  SPEAKER_00: It's been a long career.
• 3:42
  SPEAKER_01: It's uh very useful skill set to have.
• 3:46
  SPEAKER_01: And and then you know, perhaps we should start by talking about you know, one or two of the crises that have moulded your career before we move on to talking about what's going on now.
• 3:58
  SPEAKER_01: You rose up through the ranks and led property services DTZ during and in the aftermath of the global financial crisis.
• 4:09
  SPEAKER_01: And I think you should tell us a little bit about DTZ because some of our listeners won't know DTZ.
• 4:15
  SPEAKER_01: So if you can just talk a little bit about what happened to the business and you know what sort of difficult decisions you had to make.
• 4:24
  SPEAKER_00: The stories, I suppose, they're always illustrative of careers.
• 4:28
  SPEAKER_00: So for me, there's I've seen a number of um difficult times.
• 4:32
  SPEAKER_00: Initially, in the early part of my career, they were more the clients' difficulties than mine.
• 4:37
  SPEAKER_00: I was not fully exposed with my equity or or risk.
• 4:40
  SPEAKER_00: I was just merely trying to get them through a difficult time so that you know you were a third party to true risk.
• 4:46
  SPEAKER_00: But then when you become part of the management team or the ownership group and the business goes through hard times, it becomes very personal.
• 4:54
  SPEAKER_00: You're not a observer, you're a participant.
• 4:57
  SPEAKER_00: And as we went through a very bullish early 2000s and the consolidation of the real estate services industry began in earnest globally, DTZ was taking advantage of freely available debt from its banks, primarily RBS at that time, to undertake a roll-up of global real estate advisors to create a large-scale competitive global business.
• 5:23
  SPEAKER_00: Um, not every one of those deals were good deals.
• 5:26
  SPEAKER_00: There were some very good acquisitions in that time.
• 5:28
  SPEAKER_00: But as the market began to basically get too hot and froth in terms of the real estate industry, its knock-on, when it fell, came straight to the revenues of of DTZ, who had at that time become one of the largest European and Asian advisors.
• 5:47
  SPEAKER_00: It wasn't fully built out with a scale US business at that time, but it was very large across UK, Europe, Asia, and in particular China.
• 5:56
  SPEAKER_00: The problem was the bank felt at that time, as our revenues began to fall, the outlook was that we probably wouldn't be able to make good on the loans that we had written.
• 6:06
  SPEAKER_00: And therefore they said we need you to reposition the organization either through a sale or through an administrative liquidation.
• 6:15
  SPEAKER_00: Um so in middle of 2011, actually when the organization was still positive, um, we undertook an orderly sale of the business uh with the support of our banks to UGL, which was a uh largely Australian but uh then pan-Asian engineering company, engineering services, who were really riding high on the back of the Australian commodities boom.
• 6:39
  SPEAKER_00: You're digging big holes in the Outback and exporting coal, copper, everything else.
• 6:44
  SPEAKER_00: They've made a lot of their growth from that.
• 6:47
  SPEAKER_00: And their strategy was to expand into global real estate services.
• 6:50
  SPEAKER_00: So they acquired DTZ as a sort of a the white-collar client advisory.
• 6:56
  SPEAKER_00: They'd already uh amassed a large FM and facilities services platform.
• 7:01
  SPEAKER_00: So we were the the bolt-on to that.
• 7:04
  SPEAKER_00: So I took the business through that.
• 7:05
  SPEAKER_00: So from a UK PLC for 20 years into then a division of a uh uh an Australian business that ultimately didn't really understand the industry they were getting into was a great idea.
• 7:17
  SPEAKER_00: But of course, engineers are uh and this has been seen in a number of times in in real estate services, are not necessarily the best owners of um brokerage businesses, which largely DCZ was.
• 7:30
  SPEAKER_01: And I know one of the things you were able to achieve, I'm not sure how, as part of the sale, you kept the pension fund intact.
• 7:39
  SPEAKER_01: I mean, that must have been quite a difficult thing to do.
• 7:42
  SPEAKER_00: Well, it was.
• 7:43
  SPEAKER_00: I think it was maybe why the the chairman ran me one day and said, Look, would you lead the business to through the next stage?
• 7:49
  SPEAKER_00: Was I tended to look at every component part of an organization as as being of equivalent value.
• 7:56
  SPEAKER_00: So it doesn't matter whether you were a you know, you were the front desk in a reception in the Paris office or whether you were an 85-year-old pensioner, ultimately you were part of the story and journey of the company, and therefore everybody any strategy to move the company from a position of A to B should try and take everything whole along that road.
• 8:18
  SPEAKER_00: I didn't remember when by being a public company, a PLC in the UK, you get too much press for the size of your problem.
• 8:25
  SPEAKER_00: Because the the UK financial press only really liked to write about public companies in the UK.
• 8:32
  SPEAKER_00: So then you know our industry was every large global real estate services industry was going through largely a similar problem at that time.
• 8:40
  SPEAKER_00: There were cash flow problems, there were falling revenues, difficulties in every market around the world.
• 8:46
  SPEAKER_00: But because we were the largest UK PLC real estate services company, the property press and the financial press decided that we were largely front-page news every day, and it was all negative.
• 8:56
  SPEAKER_00: And so I I literally would get telephone calls from little odd ladies.
• 9:00
  SPEAKER_00: I remember one in Thurst, she was from Thursk.
• 9:03
  SPEAKER_00: Um, she was part of Bernard Thorpe.
• 9:05
  SPEAKER_00: Her husband had been a partner of Bernard Thorpe in the 60s and 70s.
• 9:09
  SPEAKER_00: Bernard Thorpe was an acquisition made to expand the UK business.
• 9:13
  SPEAKER_00: And she rang me and she was in floods of tears because she didn't know who else to speak to.
• 9:16
  SPEAKER_00: And she'd been reading that her pension fund company, um, because she was part of the DTZ Debon Thorpe Pension Fund, was going to fold and that she might lose her pension.
• 9:28
  SPEAKER_00: And I I, you know, you'd be very careful because you you can't share all of your issues in the public if you're a public company.
• 9:34
  SPEAKER_00: But I just said, look, we'd we're all doing our very best to make sure that you you're not in any difficulty.
• 9:38
  SPEAKER_00: That conversation actually gave me quite a lot of motivation to make sure that we certainly, in the sale of the company, did not take the opportunity to close the pension fund because of its deficit, because that would have created more value for, say, other third parties.
• 9:54
  SPEAKER_00: I said, no, this is all part of the same thing.
• 9:56
  SPEAKER_00: And if we don't do the right thing, we won't carry all the people.
• 9:59
  SPEAKER_00: Because they're going to be pensioners in the future.
• 10:01
  SPEAKER_00: And they've got to believe that we are going to do the same for them as we do for the existing pensioners.
• 10:06
  SPEAKER_00: But that was one you know, it was a bit an important but small part of many moving parts that had to be dealt with.
• 10:13
  SPEAKER_00: And I'm glad to say that compared to the other household name companies that went through liquidation at that time, and there were a handful, a good handful, of large organizations in the UK that went uh broke through that period and into their next life, we were the only one that kept the pension fund whole.
• 10:29
  SPEAKER_01: Aaron Ross Powell And in fact, there was another sale, wasn't there, in 2014?
• 10:34
  SPEAKER_00: It's all part of the same story, actually, because the sale to UGL was largely based on the strategy of a continued global consolidation to create large-scale mixed services companies that can provide a client, a real estate client, with whatever the needs are wherever they need it.
• 10:54
  SPEAKER_00: You know, so we went to an extent looking for a buyer at that time in 2011 who also believed in that strategy, and UGL absolutely did.
• 11:03
  SPEAKER_00: Over the period of ownership of UGL, the first three or four years, that integration of us with the facilities services business coincided with actually a quite bullish growth market.
• 11:12
  SPEAKER_00: The world came out of the GFC, real estate came out of the bloc strongly in terms of values, in terms of demand for real estate, physical and services.
• 11:21
  SPEAKER_00: And so therefore the um productivity of the organization just was exceptionally good in growth year over year.
• 11:28
  SPEAKER_00: That coincided with a fall in the performance of Australian commodities demand for services.
• 11:35
  SPEAKER_00: So ultimately, the continued growth and consolidation required UGL to get behind the acquisition of particularly a major US platform at a time when they didn't have the money to do that.
• 11:47
  SPEAKER_00: So what they agreed with the leadership of DTZ Global at that point was maybe this is the time for you to take profit from that good acquisition you made in 2011 and the other uh organizations they had integrated into DTZ.
• 12:00
  SPEAKER_00: Live to find another day and position us to be acquired by organizations that are capable of fulfilling the final stages of creating that global, large-scale, full-service, all location business, which they did.
• 12:15
  SPEAKER_00: And that was a 2015 sale, actually late 2014 uh sale of DTZ to a triumvirate private equity business of TPG, Ontario Teachers Pension Plan, and PAG of Asia, all private equity businesses.
• 12:30
  SPEAKER_01: Okay.
• 12:31
  SPEAKER_01: And then the merger with Cushman's?
• 12:34
  SPEAKER_00: Well, there was three deals in six months.
• 12:36
  SPEAKER_00: So the acquisition of DTZ, and this is where private equity acted as the accelerant that was required.
• 12:41
  SPEAKER_00: DTZ was the pump prime.
• 12:43
  SPEAKER_00: Very quickly, we closed on an acquisition that DTZ had had in flight for quite a period with Cassidy Turley, which at that point was the largest independent, as in not CBRE, JLL, Cushman and Wakefield US firm of brokers.
• 12:57
  SPEAKER_00: That was done two months after the acquisition of DTZ.
• 13:00
  SPEAKER_00: And as we were just getting used to being together with Cassidy Turley, of course, along came the potential acquisition of Cushman and Wakefield, which was something that was first mooted in 1995 by the Board of DTZ and Helian Baker at that point, but ultimately never was never able to be done.
• 13:21
  SPEAKER_00: It was felt that it was always going to be the best fit if you could ever do it.
• 13:25
  SPEAKER_00: But both sides had tried from time to time, but we never got to the position of getting it over the line until ultimately XOR agreed that they were going to exit their ownership of Cushman and Wakefield and and see who wanted to show up to buy it.
• 13:39
  SPEAKER_00: And uh that was the private equity owners of behind DTZ and the DTZ vehicle.
• 13:44
  SPEAKER_00: So even today, whilst the listeners might not see the name DTZ around very much, other than the the very successful DTZ investors, our uh fund management business.
• 13:54
  SPEAKER_00: Um I still I still use the Wii, even though I haven't been there for three years, the Royal Wii.
• 13:59
  SPEAKER_00: It is a DTZ company registered in the UK, which is the owner of Cushman and Wakefield Worldwide, which is the nomenclature of the organization, that which is CWK on the New York Stock Exchange.
• 14:12
  SPEAKER_01: Aaron Powell How was the decision made to lose the DTZ brand?
• 14:17
  SPEAKER_01: Because I mean the original firm had been going since what, 1850 something?
• 14:22
  SPEAKER_00: Aaron Ross Powell Yeah, and these are really personal It's sort of if you're a non-executive of a company, these decisions are quite pragmatic.
• 14:28
  SPEAKER_00: You just look at what you think is going to be the one that drives the most value and you take it.
• 14:32
  SPEAKER_00: But of course, in an organization at that point of, say, 40,000 people, where 27,000 were DTZ and uh 13,000 were 13,000, 14,000 were Customer Wakefield, it was never going to be it was going to be it should be an easy decision from an objective perspective, but there was always going to be it was going to be feel one way or the other.
• 14:51
  SPEAKER_00: So what was very clear though was because DTZ had not become a US major, even with the acquisition of Casty Turley, the viewers we had to become one of the top three firms worldwide to then be built for the future.
• 15:05
  SPEAKER_00: Very similar to the you know the the what became the big four in in accounting as a model, I felt that you had to take the name of the company which had the most recognition in the world's largest real estate market.
• 15:18
  SPEAKER_00: And still something like 60% of the addressable revenue in real estate services worldwide is in the US.
• 15:26
  SPEAKER_00: You know, they're nothing like that in terms of they're not 60% of GDP worldwide, far from it in terms of population.
• 15:32
  SPEAKER_00: But in spend on real estate services, they are 60% of the global market.
• 15:37
  SPEAKER_00: That would meant it was objectively very simple to do.
• 15:41
  SPEAKER_01: Thank you for explaining that.
• 15:42
  SPEAKER_01: It's something that I have wondered about over the years.
• 15:45
  SPEAKER_01: That makes a lot of lot of sense.
• 15:47
  SPEAKER_01: And um mergers and acquisitions are often very difficult to integrate.
• 15:53
  SPEAKER_01: And um I know that because my MBA thesis was actually on the various mergers at CBRE.
• 15:59
  SPEAKER_01: So how was it?
• 16:01
  SPEAKER_01: I mean, were there very different management styles and different organizational structures, or was it a piece of cake bringing the two organizations together?
• 16:10
  SPEAKER_00: Well, you start with the point that integrations are difficult even if you're just dealing with assets, let alone people.
• 16:16
  SPEAKER_00: And uh I was it's never a joke, but it's usually made in jest that as a leader of Cushman the Wakefield Worldwide, I was getting 50,000 360-degree reviews every day of my performance in the company.
• 16:29
  SPEAKER_00: You people just don't hold back on how they think and feel at any any given moment.
• 16:33
  SPEAKER_00: And putting two storied organizations together, each with deep history as cultures, was never going to be easy, but it was felt by the investors and the management of both firms that it was achievable and doable because of the vision that both firms had independently that we had to be uh much bigger.
• 16:52
  SPEAKER_00: And we had to, you know, as quickly as possible, be real everywhere our clients needed us, not beginning to grow a new office in a country that was important to them, but we could show up and actually they could contract with us, give us all of their needs, this is in particular large corporate occupiers worldwide, to run their premises, find their premises, secure their premises, power their premises, and do that with real capability.
• 17:18
  SPEAKER_00: Both firms knew that was their future.
• 17:20
  SPEAKER_00: And they both knew that their counterparty was the most likely solution to achieving it.
• 17:25
  SPEAKER_00: So the vision was entirely aligned, which then made everything else so much easier.
• 17:30
  SPEAKER_00: And I think we made a a really good job of it ultimately.
• 17:34
  SPEAKER_00: Uh it wasn't easy, but we took the time, took the the personal relationships very, very seriously, and then the aligned vision got us over the line.
• 17:43
  SPEAKER_00: I mean, the by that time, certainly the management team in DTZ had a lot of experience of doing it well and badly, and learning your lessons and not repeating them.
• 17:54
  SPEAKER_00: So, you know, I'm very proud of what Cushman Wakefield uh has become and is.
• 17:59
  SPEAKER_00: It's a great business.
• 18:00
  SPEAKER_00: But now as a client, I have a different lens on that.
• 18:03
  SPEAKER_00: So, you know, that itself is is another interesting uh view of uh of of your your career.
• 18:10
  SPEAKER_00: You see it from a completely different um position.
• 18:14
  SPEAKER_01: Absolutely.
• 18:14
  SPEAKER_01: And you became global president and group CEO of Cushman's.
• 18:20
  SPEAKER_01: And I mean, was it your Barak style that got you to the top, or um everything that you'd learnt during these um you know various transactions?
• 18:30
  SPEAKER_00: Well, I think being being a blunt instrument can only get you so far.
• 18:33
  SPEAKER_00: You know, speak your mind, truth to power.
• 18:37
  SPEAKER_00: In complex global organizations with um, you know, not only different organizations have different cultures, different countries have different cultures, different ownership groups have different cultures and different needs.
• 18:49
  SPEAKER_00: So being that blunt instrument is only ever going to get you so far.
• 18:53
  SPEAKER_00: It gets you heard, but doesn't necessarily get you trusted.
• 18:57
  SPEAKER_00: You have to have other skills.
• 18:58
  SPEAKER_00: So um hopefully over that period from sort of rescue to leadership, the other skills in terms of of nurturing talent, of onboarding people, of of seeing things from the other person's perspective, but still managing to get them to where they needed to be or where their business needed to be came to the fore.
• 19:18
  SPEAKER_00: And then ultimately it's about stakeholder value.
• 19:20
  SPEAKER_00: Just being a really good leader of people doesn't mean you're going to be a good leader of a public company that has to every quarter drive returns, create growth.
• 19:29
  SPEAKER_00: That is a very different um skill set.
• 19:32
  SPEAKER_00: And ultimately, you know, I spent 90% of my career being the well, it's classic first third being just a pure agent advisor learning about the industry, second third becoming a leader of part of that, and a growing part of that, and the last third, ultimately being responsible for what we had built in all essences, whether that's productivity, returns, capital returns, you know, the league tables, how good are we?
• 19:56
  SPEAKER_00: You know, how are we worse than we were last year?
• 19:58
  SPEAKER_00: Do we do more deals than we did last year?
• 20:00
  SPEAKER_00: Are we winning more than we're losing?
• 20:01
  SPEAKER_00: These are all critical metrics uh for leadership that you have to stand or fall by, as opposed to if you're just a you know a a great advisor, you could be the number one girl, guy in your market, but uh nobody's putting those metrics on you every year.
• 20:17
  SPEAKER_00: You're you're good, you're an asset, and therefore we're happy to have you.
• 20:21
  SPEAKER_00: Leadership, far, far more transparent in performance.
• 20:24
  SPEAKER_01: And with all these sales and mergers and integrations, do you have time for client work, transactional work, or did that not um feature?
• 20:36
  SPEAKER_00: I couldn't give up on it ever.
• 20:38
  SPEAKER_00: That may be a weakness in my makeup in that I was never maybe maybe I didn't feel that I was ever going to be such a great leader that I could give up the credibility or maybe just the value to the company of me be being still close to some important clients in an important market.
• 20:55
  SPEAKER_00: So, you know, maybe that was my crutch to lean on, um, or maybe it was a good thing to do.
• 21:01
  SPEAKER_00: In hindsight, it turned out to be a very good thing to do, because I'm I now work with one of those clients.
• 21:05
  SPEAKER_00: So businesses like Argent and King's Cross, where I was um you know, I was one of the lead commercial advisors on the development since the uh the acquisition by Argent of the site, I couldn't give up on it.
• 21:17
  SPEAKER_00: Not just were they such great people and the site was just amazing, we all know what it has become.
• 21:23
  SPEAKER_00: Getting away from the day-to-day dealings of people and markets and investors to actually sit in a room with architects with real vision and globally important teams doing something that fundamentally improves the lives of a city and everybody who lives in it.
• 21:41
  SPEAKER_00: That was a wonderful place to be as an oasis of calm.
• 21:45
  SPEAKER_00: So I did yes, I did keep three or four of those things going, um, not just in London.
• 21:50
  SPEAKER_00: And I think it to an extent it ke it also kept my feet on the ground because I was immersed, you know, it wasn't people trying to deal with me as a manager.
• 21:58
  SPEAKER_00: You know, do people tr Ever really tell you the truth.
• 22:02
  SPEAKER_00: I don't know.
• 22:02
  SPEAKER_00: Very often they don't.
• 22:04
  SPEAKER_00: In the client rooms, there's no room or space for anything but just what is happening, who is good, who is not good.
• 22:11
  SPEAKER_00: You know, what should we do?
• 22:12
  SPEAKER_00: And that was just refreshing for me and kept me.
• 22:15
  SPEAKER_00: Um maybe kept my feet on the ground a lot more through uh through because also you feel the pain of your clients through good periods and bad.
• 22:21
  SPEAKER_00: And you get a better understanding of how easy or difficult markets are at any time.
• 22:25
  SPEAKER_00: You're not relying on a a manager doing you an email to tell you how it is just before you get on an earnings call.
• 22:31
  SPEAKER_00: You actually live it.
• 22:32
  SPEAKER_01: Yeah, I I wondered because um I think it's I mean pretty impressive to be able to manage both, because that management role can be all encompassing.
• 22:41
  SPEAKER_00: Yes.
• 22:41
  SPEAKER_00: I mean uh no doubt the firm understood that it you know it had to make compromises because I had to be allowed to have some time to do what I really wanted to do.
• 22:49
  SPEAKER_00: But if they'd said 100% it just all has to be on the management of the company, I might have made a very different decision.
• 22:55
  SPEAKER_00: In fact, I would have.
• 22:56
  SPEAKER_00: I would have been here in London sitting in rooms of of very different types of people and commuting to the US every week, largely three weeks out of four for seven years.
• 23:06
  SPEAKER_01: You've worked across global markets and we mentioned at the beginning the comment you made about challenges for investors at the moment.
• 23:16
  SPEAKER_01: How competitive is London today against New York, Dubai, Singapore?
• 23:23
  SPEAKER_01: I mean, where is London genuinely ahead and and and where is it falling behind?
• 23:28
  SPEAKER_01: And and and what are the overseas investors saying to you?
• 23:32
  SPEAKER_00: Well, it it's too easy to generalize, and of course we're we're entering into a world of you know, the 140 typefaces tells the story, not the nuance that is the reality of everything.
• 23:43
  SPEAKER_00: So London's in a tough spot.
• 23:46
  SPEAKER_00: Uh London has been in tough spots before.
• 23:48
  SPEAKER_00: And I've been working here for 40 years, and it was it was in a much harder place when I first came here than than it is today.
• 23:57
  SPEAKER_00: But the lens that we need to look at London through is in comparison to other markets, which could absorb either the equity or the demand that London would otherwise have had had it been, you know, performing and on its, you know, really on its toes, not on its heels the way it is at the moment.
• 24:16
  SPEAKER_00: And equity, cash, has no barrier.
• 24:19
  SPEAKER_00: It can choose to invest anywhere in the world.
• 24:22
  SPEAKER_00: It doesn't have to come to London.
• 24:23
  SPEAKER_00: We know there are certain fund structures that need to be deployed domestically, but more and more over time that is less important.
• 24:30
  SPEAKER_00: And if money can choose to be anywhere in the world at the moment, the first question you get asked is why London, given the myriad, and this is no simple solution to this, but the myriad of issues that we have loaded on over the last 10 to 15 years that make it slightly less attractive.
• 24:49
  SPEAKER_00: And I say this I absolutely think London is still the greatest 360-degree city in the world.
• 24:56
  SPEAKER_00: Barnon.
• 24:57
  SPEAKER_00: New York is amazing.
• 24:58
  SPEAKER_00: It's the only one that actually gets close.
• 25:01
  SPEAKER_00: But in terms of just the multi-everything, multi-ethnicity, multi-everything, we are an incredible city.
• 25:07
  SPEAKER_00: And that is why it remains deeply attractive to global investors.
• 25:12
  SPEAKER_00: But we have to answer the why and and the buts that they bring.
• 25:18
  SPEAKER_00: And I think at the moment we are moving away from being attractive to being that sort of, you need to give me the reason, the compelling reason why.
• 25:26
  SPEAKER_00: I used to have one.
• 25:27
  SPEAKER_00: London was great, liquid, I could get my capital in, get it out, uh, cost of transactions very low compared to other global markets, no taxation on my profits.
• 25:39
  SPEAKER_00: That was a really attractive.
• 25:41
  SPEAKER_00: Much of that has disappeared.
• 25:43
  SPEAKER_00: We remain largely the most transparent market, the most highly regarded in terms of availability of advice and services.
• 25:51
  SPEAKER_00: And that's not just real estate, that's banking, that's accounting, every aspect that's important to a global investor.
• 25:57
  SPEAKER_00: So actually, there's still a green light from global investors to would I invest in London if I could find the right asset?
• 26:05
  SPEAKER_00: Yes.
• 26:05
  SPEAKER_00: But finding that asset and having it being understood and risk-managed is getting harder, particularly in development.
• 26:15
  SPEAKER_00: Particularly in development.
• 26:17
  SPEAKER_01: Which begs the question, you know, where where would you look now for the right asset?
• 26:23
  SPEAKER_00: I think if you if you'd asked somebody this question a year ago, I would say, you know, Middle Eastern investors are making a great deal of capital through their investments in the Middle East, in the GCC at the moment.
• 26:34
  SPEAKER_00: Still, and even more so, the um data center markets globally, but particularly in the US, are seeing very high returns.
• 26:41
  SPEAKER_00: But that is a, to an extent, a a small market, you have to be with extremely high barriers to entry.
• 26:48
  SPEAKER_00: But that point about the Middle East being great for the Middle Eastern capital.
• 26:52
  SPEAKER_00: Now, post everything that's happened around Iran and Israel, and the returns in the Middle East are looking pretty difficult at the moment.
• 27:02
  SPEAKER_00: So I would say that on the whole, doing development in all sectors globally is getting tough.
• 27:08
  SPEAKER_00: There's very few just compelling markets you can get into and see returns that are better than you could get, say, from just putting your money in a credit fund and lending money to the market, which of course has become the primary strategy of many of what were historically direct capital investors in London, who have now available globally to borrow money from, but not see as co-investors or equity providers.
• 27:34
  SPEAKER_00: That's going to be hard to reverse.
• 27:37
  SPEAKER_00: It does take a long time and a lot of money to get a building started on-site in London, and then the construction of that building is higher per unit, larger than any other city in the world.
• 27:52
  SPEAKER_00: And ultimately, at that point, all of those costs and efforts take more time.
• 27:58
  SPEAKER_00: And I think this is the thing that's not really understood.
• 28:00
  SPEAKER_00: Yes, you know, you've people sort of understand, okay, it takes a bit longer and then it's a bit more expensive.
• 28:05
  SPEAKER_00: But the length of time that something takes to do simply magnifies the impacts of an external macro event ruining your underwriting.
• 28:16
  SPEAKER_00: So if something takes two, two and a half years to do, I think we can all have an intuitive view of how the world just sort of might look in.
• 28:23
  SPEAKER_00: We used to be able to, I'm not so sure now, but but two and a half years is very different to five or six or seven.
• 28:29
  SPEAKER_00: And if you if you've got to wait six or seven years to get your expected returns on a high-cost equity investment, you have got to be so sure that there is going to be no macro negative event in that period.
• 28:43
  SPEAKER_00: And I don't think anybody can say that with any certainty anymore.
• 28:47
  SPEAKER_00: So markets where you can get in, you can get it up, built, and you can get your revenue flowing in whatever use that that is, whether it's condo sales, BTR, it's a logistics building or it's an office, retail, whatever.
• 29:02
  SPEAKER_00: But you can get up, you've got demand from the consumer, you can uh uh get your revenue flowing, and then if you choose, you can exit, are those markets which are by far the most attractive globally at this time.
• 29:13
  SPEAKER_00: London does not conform in terms of development to largely any of those fundamentals I've just listed.
• 29:19
  SPEAKER_01: Aaron Ross Powell And where do those s circumstances exist?
• 29:23
  SPEAKER_01: I mean, is there anywhere else in Western Europe where it is easier and quicker to develop?
• 29:30
  SPEAKER_00: Well, again, generalizations.
• 29:32
  SPEAKER_00: Western Europe is absolutely right, because if you exclude Western Europe, the rest of the world is easier.
• 29:38
  SPEAKER_00: Generalization, because I'm sure listeners will find you will say, no, no, I and I know what it's like in Buenos Aires, and it's really difficult.
• 29:44
  SPEAKER_00: But if you go back to the point that the size of addressable spend and investment is is where the market really is.
• 29:51
  SPEAKER_00: I used to I used to use this example for graduates in in in the induction conversations, which is what is the most populo city in Amir?
• 29:59
  SPEAKER_00: And sometimes people would get it right.
• 30:01
  SPEAKER_00: It's Cairo, and it's 32 million people.
• 30:05
  SPEAKER_00: DTZ didn't have an office there.
• 30:06
  SPEAKER_00: Cushman didn't have an office in Cairo, but we each had an office in Bristol.
• 30:10
  SPEAKER_00: That's odd, isn't it?
• 30:11
  SPEAKER_00: Because Bristol's got, I don't know, 400,000 people, good market, but 400,000 got an office.
• 30:16
  SPEAKER_00: Cairo, 32 million, no offices.
• 30:19
  SPEAKER_00: The value of real estate assets, commercial illicit assets in Bristol, far, far outweighed the value of total market of commercial buildings in Cairo.
• 30:30
  SPEAKER_00: There was no trading market in Cairo.
• 30:31
  SPEAKER_00: People wouldn't be able to buy and sell an office building as an income-producing asset or a shopping centre.
• 30:37
  SPEAKER_00: There was no market.
• 30:39
  SPEAKER_00: So you're saying London compares with has to compare with other markets which are large and investable.
• 30:46
  SPEAKER_00: London, Paris, Madrid, Milan, Frankfurt, etc., they're all larger going through the same problems at the moment of and bureaucracy is shorthand, but every aspect of what of oversight and administration that is required to build a big building that if it wasn't well built might fall down, might put people in danger.
• 31:07
  SPEAKER_00: Yes, I we all I think the industry understands very clearly that you have to do it right and do it properly.
• 31:12
  SPEAKER_00: But governments are not putting the infrastructure in that allows those decisions to be made in a timely way.
• 31:18
  SPEAKER_00: And that's a Western Europe problem, not a worldwide problem.
• 31:23
  SPEAKER_00: And that's slowing us down.
• 31:25
  SPEAKER_00: But London doesn't actually compete with Paris and Milan.
• 31:29
  SPEAKER_00: And London competes with New York and Tokyo and Sydney in terms of where large global investors who could choose to put their money anywhere would choose to make big bets.
• 31:40
  SPEAKER_00: And that's where the we don't get a pass because it's tough in all of Western Europe.
• 31:45
  SPEAKER_00: You know, it's hard to build a data center anywhere in Western Europe at the moment because of all of the issues of limited power availability, infrastructure being historic, et cetera, et cetera.
• 31:54
  SPEAKER_00: But investors just go, well, if it's hard, we won't do it.
• 31:57
  SPEAKER_00: We will go where it's easy and when our returns are largely well underwritten and guaranteed.
• 32:03
  SPEAKER_00: So London has to compete with not the lowest common denominators of difficult markets, but the highest common denominators, because London has always been a part of the group of investable highest common denominator cities.
• 32:17
  SPEAKER_01: What would need to happen for international investors to commit significantly more capital?
• 32:24
  SPEAKER_00: Aaron Ross Powell So I think making it easier to achieve the ability to begin a new development.
• 32:33
  SPEAKER_00: You start with the fundamentals.
• 32:34
  SPEAKER_00: Is this a growth economy?
• 32:35
  SPEAKER_00: Let's go back a step and get 25,000 feet and look down.
• 32:39
  SPEAKER_00: In a growth economy where jobs are being added to the pipeline, where there are career paths for people from all parts of society, where there is investment from inside and outside in all aspects of that country's productivity from agriculture to AI, the full um soup to nuts.
• 33:00
  SPEAKER_00: That is a a place where investors would have confidence in investing.
• 33:04
  SPEAKER_00: Ultimately, you you need a consumer.
• 33:06
  SPEAKER_00: Everything you you own or build needs a consumer, somebody to pay the rent, somebody to buy the flat, somebody to rent the shop and be confident that they can get a um you know, they can sell things in that in that shop.
• 33:20
  SPEAKER_00: At the moment, London is not that, UK is not that.
• 33:23
  SPEAKER_00: You know, this is both, but London is sometimes not the UK from a global investor's perspective.
• 33:28
  SPEAKER_00: But certainly the UK is not deemed to be in that position, and we're not doing a very good job at our PR globally.
• 33:33
  SPEAKER_00: So I I begin with, you know, we have to become that growth economy again.
• 33:38
  SPEAKER_00: Uh we have to be attractive for people to want to live here and work here.
• 33:43
  SPEAKER_00: I'm not going to get drawn into non-doms and all the rest of it, but ultimately it takes a huge amount of tax to be paid by the man on the street to replace every large high net worth individual who pays tax here who decides to leave because the burden has become imbalanced for them.
• 34:01
  SPEAKER_00: It may not be imbalanced from your view of the world, but the world doesn't make the decision, those individuals make that decision.
• 34:07
  SPEAKER_00: And a great deal of the high growth that came through the UK in the 2000s and in the teens was based on people coming from other parts of the world into the UK, bringing their operations, bringing their wealth.
• 34:18
  SPEAKER_00: Yes, they weren't paying a great deal of income tax on that, but they were contributing with their wealth in other ways, employing people who are then paying PAYE, national insurance.
• 34:28
  SPEAKER_00: We're in a negative flow on that.
• 34:31
  SPEAKER_00: So it helps if overall people can see the country as being welcoming, welcoming to all, welcoming for people to build careers, build wealth, and stay.
• 34:41
  SPEAKER_00: That changes the fundamental headlines about is London a good place to invest?
• 34:45
  SPEAKER_00: And then it's about how does the industry work.
• 34:48
  SPEAKER_00: Is it functional or dysfunctional?
• 34:49
  SPEAKER_00: Currently, developers and it isn't every headline every day about, particularly residential developers, saying we can't do it.
• 34:57
  SPEAKER_00: The targets of house beds to be built by successive governments versus the reality is it widening.
• 35:05
  SPEAKER_00: So even with greater, you could say, ambition by successive governments to get the house market moving, the building, construction market moving, the results are going in the opposite direction, to the point where really it's negligible.
• 35:18
  SPEAKER_00: We're in a position where it'll take us many, many years to create a balance of supply and demand.
• 35:24
  SPEAKER_00: And of course the counterpoint is when there's low supply, values go up and costs go up.
• 35:29
  SPEAKER_00: So entirely opposite will happen in the near term that the government would like to achieve.
• 35:35
  SPEAKER_00: So we can make the process of creating homes, businesses, buildings, offices easier, cheaper, faster.
• 35:43
  SPEAKER_00: It doesn't need fundamental change to the rules of fiscal policy.
• 35:47
  SPEAKER_00: It just means employ enough planners to get the planning consent through, employ enough safety administrators to actually regulate now what we have to get through on Building Safety Act.
• 35:56
  SPEAKER_00: And if you invest in that, then the growth will be easier to achieve.
• 36:00
  SPEAKER_00: If you don't do that, it's going to be very, very difficult to get the confidence back in the short term.
• 36:05
  SPEAKER_01: In addition to that, I mean schemes seem to be being turned down, you know, where they shouldn't be.
• 36:12
  SPEAKER_01: I mean, there have been the Lancet scheme in Lewisham, which seemed to be negotiated over a period of years, and then somebody wanted to uh renegotiate.
• 36:23
  SPEAKER_01: There have been the Barclay uh schemes in, I think, Subwark, where you know quite big residential schemes, you know, turned down.
• 36:30
  SPEAKER_01: If I mean if there is a sort of anti-development sentiment in the local authorities, it makes it makes it difficult.
• 36:36
  SPEAKER_00: It does make it very difficult.
• 36:38
  SPEAKER_00: And I wouldn't go necessarily The organizations I work with now have very good relationships with with planning authorities.
• 36:44
  SPEAKER_00: They've they've been spent many, many years-related Argent is just a wonderful example about how to get good consents by having good relationships with the relevant authorities.
• 36:55
  SPEAKER_00: But on the whole, that you know, individual examples of success do not make the market.
• 37:01
  SPEAKER_00: The real market is the volume house buildings builders really being off the pitch at the moment is terrible.
• 37:07
  SPEAKER_00: You will never make the the the um the numbers up if the really big players don't deliver at scale.
• 37:13
  SPEAKER_00: And they're they're all making the opposite uh sentiment views at the moment.
• 37:17
  SPEAKER_00: So we have to the local authorities, it is not a matter of being anti-development, it's a matter of different stakeholders within that borough, each wanting something from the development, from the the capital that's going to be invested.
• 37:33
  SPEAKER_00: Some are affordable housing, some are capital contributions, some are theatres, some are different uses.
• 37:40
  SPEAKER_00: And the inability to have to speak to one voice and have one agreed structure again is creating time cost.
• 37:48
  SPEAKER_00: And you can't appeal everything.
• 37:49
  SPEAKER_00: You can't just keep going to the Mayor of London and and saying, please call this in, because you'll say yes.
• 37:54
  SPEAKER_00: Because that's a dysfunctional market and it's expensive, and it's time cost it costs time.
• 38:00
  SPEAKER_00: But the local authorities themselves have got to align what they want.
• 38:04
  SPEAKER_00: Historically, of course, the local authorities you know, they everybody feels one way or another that the developers are going to come in, use their land, or benefit from their planning consent, their gift, and make off in a new Rolls-Royce to buy the next one and then buy another Rolls-Royce and go to Monaco.
• 38:22
  SPEAKER_00: For 99% of the UK's developers, that is entirely not their story.
• 38:27
  SPEAKER_00: You know, there are good companies doing good things and trying to get minimum returns on their uh on their capital and get things moving for the good of their organization and the country.
• 38:37
  SPEAKER_00: If you say, you know, not only do I want high value for my land, because I'm selling land, I want the best value, and then I want you to build me 20, 30, 40, 50% of the site out for affordable housing or social housing.
• 38:51
  SPEAKER_00: Yes, a lot of that is is required.
• 38:54
  SPEAKER_00: And then you have significantly inflated construction costs, which would come through post-Grenfell and Building Safety Act, and then you have time added to get the approvals.
• 39:06
  SPEAKER_00: You'll you're just loading on cost, on cost, on cost, and there's no viability left.
• 39:11
  SPEAKER_00: And that's when the public market, the private sector, but publicly quoted companies, say we're out.
• 39:16
  SPEAKER_00: Because there's nothing left in it for our money.
• 39:18
  SPEAKER_00: We may as well just leave it in the bank.
• 39:20
  SPEAKER_00: And that will make more money in the bank with a guaranteed return than we will by putting it into the in these schemes.
• 39:27
  SPEAKER_00: And we don't have any value growth either to rely on.
• 39:30
  SPEAKER_00: There's no assumption that yields will compress and get lower because globally borrowing rates are are rising.
• 39:36
  SPEAKER_00: And there's a there's a a crunch in affordability.
• 39:39
  SPEAKER_00: So we don't really expect rents to grow too much for any of the assets.
• 39:43
  SPEAKER_00: So that's a hard place.
• 39:45
  SPEAKER_00: So the local authority's got to say, if I want growth in my borough, I'm gonna have to compromise on one of those two or three huge fundamentals to make viability return to the market.
• 39:57
  SPEAKER_00: At the moment, that does not seem that debate internal argument does not seem to be what's on the table.
• 40:04
  SPEAKER_00: Although I would say that, again, I say I do overuse cliches, and I know that's the sort of the tool of the lazy, but sometimes that they're good.
• 40:12
  SPEAKER_00: You can always do a good deal in a bad market, and you can do a really bad deal in a very good market.
• 40:18
  SPEAKER_00: Okay, so it's asset specific, it's site specific, it's borough specific.
• 40:23
  SPEAKER_00: Because we have a uh related Argent, we have a wonderful relationship with with Barnett.
• 40:27
  SPEAKER_00: Absolute partnership, and they're they're excellent.
• 40:29
  SPEAKER_00: And they're doing their absolute best um for their council taxpayers, the everybody in the borough.
• 40:36
  SPEAKER_00: And it's uh in a tough world, but you know, we we we act in many London boroughs, and some are easier and harder than others.
• 40:44
  SPEAKER_01: You've mentioned um related argents, so let's just um talk a little bit about that because um you joined as strategic um advisor after you left Cushman's and um then um last year became chairman.
• 40:58
  SPEAKER_01: I mean, I think I probably know the answer to this, but um what attracted you to the business?
• 41:05
  SPEAKER_01: And what did you feel um you would contribute towards strategy for the next phase, effectively?
• 41:13
  SPEAKER_00: It's a fascinating question.
• 41:14
  SPEAKER_00: I've not actually ever asked them, the colleagues here directly that question.
• 41:19
  SPEAKER_00: It's easy to answer why why I was attracted, less so why they might have been attracted.
• 41:23
  SPEAKER_00: So but ultimately having worked alongside Argent, um, not just in in London, because they were doing incredible um master plan schemes all over the UK in the in their origination, you get to know people, you get to know whether you'd like them, you get to know whether you'd like to spend more time with them, other than just as an advisor.
• 41:42
  SPEAKER_00: And I always sort of hankered to I wonder if one day, if I'm not doing this anymore, would something like that be something they might be prepared for me to spend some time on?
• 41:52
  SPEAKER_00: It was largely nothing more than that.
• 41:54
  SPEAKER_00: And and when I came to the end of my period with Cushman and uh I think spent eight, nine years leading the global company and taking it through the the the IPO in New York, which is extremely exciting and actually very educational, I became a different skill set, really.
• 42:13
  SPEAKER_00: Um, you know, deals, mergers and acquisitions, corporate finance, structured finance.
• 42:16
  SPEAKER_00: That's actually probably what I spent the last ten years doing, not advising on whether the reception of that office building should be square or rectangular, or the floor to senior height should be 2.85 metres, not 2.75 metres, which is the old BCO standard.
• 42:30
  SPEAKER_00: And so, like all organizations, plotting your future is critical to management teams.
• 42:37
  SPEAKER_00: And um my great friends and colleagues that built Argent themselves, so David and Partridge and Roger Madeline and Robert Evans and everyone else, they themselves are going on to a different stage of their careers.
• 42:49
  SPEAKER_00: Incredibly great young management team coming through at related Argent here, Tom or Wener and Ollie and Palm.
• 42:56
  SPEAKER_00: And there was just an of this opportunity to get involved with the next generation.
• 43:00
  SPEAKER_00: And ultimately, as a as a you know, as a people person, that's a throwaway line, but you know, I I do value the day and the hour spent with who you're spending your time with.
• 43:10
  SPEAKER_00: The outcome should be better if they're good people.
• 43:12
  SPEAKER_00: But I don't focus necessarily initially on the outcome.
• 43:14
  SPEAKER_00: I focus on is that going to be a really good room to be in?
• 43:18
  SPEAKER_00: And that's what attracted me.
• 43:20
  SPEAKER_00: So the the the brand over the door, look at the physical contribution that this organization in its history has made.
• 43:26
  SPEAKER_00: Of course, it's just about the most attractive person on the dance floor at any given time that you'd want to be associated with.
• 43:33
  SPEAKER_00: But it was the actual next generation that made me far more focused on actually if I'm lucky enough to be asked to do anything else, I'll largely say no to that because I would rather be doing it with you.
• 43:43
  SPEAKER_00: And uh luckily I don't, you know, I I do have more than one iron in in in the fire, but ultimately I think uh uh not even related Argent could bear me five days a week.
• 43:54
  SPEAKER_01: It's a very it's a great answer.
• 43:56
  SPEAKER_01: So I'd be actually watching Brink Cross Town, you know.
• 44:00
  SPEAKER_01: Going up, and it just seems I mean, you know, just every day there seems to be a bit more, and it all seems to be going really well.
• 44:07
  SPEAKER_01: One sort of forgets that it has been about 20 years in the making, because once Argent got involved, it seemed to go actually quite quickly.
• 44:15
  SPEAKER_00: Well, these big things they take a long time.
• 44:19
  SPEAKER_00: But actually, not picking it up, but it was 2016, 2015 and 16 that Arnett went out to tender on who they wanted their development partner being, which coincided with related companies of America partnering up with Argent of the UK, with Brent Cross primarily as being their future vehicle together.
• 44:39
  SPEAKER_00: The scale of Brent Cross meant that there would be a lot more housing, social housing, affordable housing, housing of every sort, at high volume on Brentcross Town site.
• 44:51
  SPEAKER_00: So that attracted Related, because ultimately Related in their history is the largest private social housing builder, developer, operator in America.
• 45:01
  SPEAKER_00: And King's Cross is was already by that point largely in the rearview mirror because so much had been pre-let.
• 45:08
  SPEAKER_00: I mean, the great gestat here at King's Cross is we never finished a speculative office building or any office building with space to let.
• 45:16
  SPEAKER_00: Every single one of the buildings at King's Cross was leased before practical completion.
• 45:21
  SPEAKER_00: So even in 2016-17, it was all done.
• 45:24
  SPEAKER_00: Yes, the Google Building Alphabet Building has just been completed and uh they're moving in at the moment.
• 45:29
  SPEAKER_00: It's a very exciting time.
• 45:31
  SPEAKER_00: Um and we developed and managed that site all the way out.
• 45:34
  SPEAKER_00: It's the largest office building that's been put up in London for you know tens of years now.
• 45:39
  SPEAKER_00: But ultimately that we knew that was going to be the last asset for related Argent at King's Cross.
• 45:44
  SPEAKER_00: So all of the effort is in what are we going to do next and what are we doing next?
• 45:48
  SPEAKER_00: So we should forget King's Cross, be thankful, and look at Brent Cross and go, already that is a maturing, mature mixed-use environment within with every type of use and occupier, whether it's the you know Sheffield Halland's campus through to really highly successful build-to-rent, condors for sale, we have student housing, we have co-living, retail is really getting moving now up there, and of course we can keep doing that on that site for another 10 to 15 years.
• 46:22
  SPEAKER_00: So it is nice to be able to say that King's Cross, actually, or Brindley Place or Piccadilly, they weren't one-offs, that this organization's DNA continues to deliver outstanding placemaking.
• 46:35
  SPEAKER_00: And I think for me, as I've learned sitting with the team here, you know, success looks like the contribution of a place to a society, not an architectural award or something else.
• 46:46
  SPEAKER_00: They they come, but I think the team of Argent related Argent are far more focused on how the ground plane of a new location makes people feel and how they use it.
• 47:00
  SPEAKER_00: And largely the above the first floor level, you know, the buildings are great, but nobody remembers what's going on in the sky.
• 47:07
  SPEAKER_00: You remember what you experience when you when you walk bare feet through the fountains and the parks, the incredible parks that we have at Brent Brent Cross Town.
• 47:16
  SPEAKER_00: And that way you make people feel and whether they want to live there or even just visit there, because so much of this is about integration with this the city around you, is what drives the brand success and makes, I think, related art and attractive to most London boroughs when it comes to, okay, who would we like to see come to our location and be part of building the next iteration of what a great London location looks like.
• 47:45
  SPEAKER_00: It's not a matter of what opportunity, it's a matter of the right opportunity.
• 47:49
  SPEAKER_01: You mentioned um related as a sort of major American house builder.
• 47:57
  SPEAKER_01: What are they doing now?
• 47:58
  SPEAKER_01: Because I understand they've had a sort of slight shift in strategy in the US.
• 48:03
  SPEAKER_00: It's an exciting time for the company in many ways.
• 48:07
  SPEAKER_00: One of the things I I sort of made a decision about my own how I spend my own time after Customer Wait for was very much I'd I'd like to spend some time working with private organizations, not public ones.
• 48:18
  SPEAKER_00: Um for a while I I'd rather be away from that quarterly earnings uh hamster wheel, the short-termism that the markets to an extent drive nowadays, and work within an organization that is well funded and can pivot based on what's happening around them.
• 48:34
  SPEAKER_00: It's very hard, as we've seen recently, for say the UK Reeds to say, I'm not going to do this anymore.
• 48:39
  SPEAKER_00: The thing I've been doing for 40 years, I'm going to do something else completely.
• 48:43
  SPEAKER_00: That's not why investors are buying your shares.
• 48:46
  SPEAKER_00: They're buying because they want to be in the asset markets that you own.
• 48:50
  SPEAKER_00: Private companies can do largely what they see as the right thing for them at that time and that moment.
• 48:57
  SPEAKER_00: Um, so I'm attracted by organizations that are sort of now sea generous, or again, a Latin phrase, but can do any use.
• 49:08
  SPEAKER_00: So if you have very good people and very good advisors, there's no reason you can't move from one sector to another.
• 49:14
  SPEAKER_00: And in the US, the pivot that related as management still building strict next phases at Hudson Yards and other large assets in New York and across America in the in their uh historic uh master planning models.
• 49:29
  SPEAKER_00: But moving to data centers to take advantage of what is, without question, the single most highly invested asset class globally currently, is something that only a great entrepreneurial organization can do.
• 49:43
  SPEAKER_00: And they've lent into that and and and are being proven to be very successful in a relatively short period of time, go from being, you know, it's a great idea to be a nascent part of the business to being now a major part of the business and their focus and the focus of the organization.
• 49:59
  SPEAKER_00: And we can learn from that.
• 50:01
  SPEAKER_00: You know, every other part of related globally can learn from that entrepreneurialism and um it does but it doesn't have to be, you know, it's it's a spirit.
• 50:10
  SPEAKER_00: Yes, it's in outputs that are in data centers in the US currently, but the spirit of pivoting to where returns uh may be better is something that I find highly attractive and challenging because it it forces management out of their out of the day job into actually, is there something we can be doing better with our time?
• 50:29
  SPEAKER_00: And that is is something that is some, you know, again, if you've worked in a public company for a long time or at a single sector, it feels quite a challenge, a frightening thing.
• 50:39
  SPEAKER_00: It's stimulating, it's absolutely great, really is.
• 50:42
  SPEAKER_01: And are you able to talk about any potential pivots in the UK?
• 50:47
  SPEAKER_01: Um not really.
• 50:48
  SPEAKER_00: Um I don't really want to promote not secrets, but things we're doing, you know, I don't want my colleagues to hear about them first on the Property Sheaf uh podcast.
• 50:57
  SPEAKER_00: Much as I'd love to tell you, but I think if we just go rewind the tape one minute and say you go, actually, we should be looking at those things that any experienced, sophisticated real estate financial person would say, actually, that's the sort of thing that still is attractive in the UK, but you can do here.
• 51:17
  SPEAKER_00: I mean, we're not gonna rated Argent's not gonna pick up and start doing something in Riyadh.
• 51:22
  SPEAKER_00: You know, you the great thing about real estate is you know value is driven in the local relationships, local understanding.
• 51:29
  SPEAKER_00: But what would be a better market, a better sector, a better business, a better city, or no, to to be, and there's no better city than London, but there are other cities in their own way as good as London.
• 51:42
  SPEAKER_00: So there's investable markets in the UK that fundamentally lots of people are looking at, like Oxford and Cambridge, like Bristol in a different time than my uh the earlier conversation about Bristol.
• 51:53
  SPEAKER_00: But uh these are growth markets with good fundamentals and where you've always got to be uh ready to say yes to the call and and have a look.
• 52:03
  SPEAKER_01: No, absolutely.
• 52:04
  SPEAKER_01: Have an open mind.
• 52:05
  SPEAKER_01: And um, you know, everything is changing so quickly, uh one has to be prepared to move quickly.
• 52:11
  SPEAKER_00: Yeah, I I think for people of who've been doing something for a long time, it is it is interesting that um things are taking longer to be done, but the world is changing faster beneath us.
• 52:21
  SPEAKER_00: And they're in conflict.
• 52:23
  SPEAKER_00: But you have to be able to manage them both at the same time.
• 52:26
  SPEAKER_00: And uh yeah, that's a that takes a lot of management, time and energy to work out truly what what is a really good bet or not.
• 52:34
  SPEAKER_00: Something that you might have passed on historically, you'd go back to and think, actually, that works now, and vice versa.
• 52:40
  SPEAKER_01: Now, John, you are also chair of another development company, Innovo real estate um development.
• 52:48
  SPEAKER_01: Now, can you tell us a little bit about Innovo and and also what attracted you to that role?
• 52:53
  SPEAKER_00: Well, I think it's there'll be similarities with um other than the the history that I have with related argent.
• 52:59
  SPEAKER_00: Innovo is uh one of the Middle East's largest construction companies, tier one construction companies.
• 53:05
  SPEAKER_00: So they have over the last twenty, thirty years created an organization that builds the buildings that we would all know for postcards and and images of of Dubai and Abu Dhabi and other great cities of the Middle East, the tallest buildings, the largest buildings, the all uses.
• 53:22
  SPEAKER_00: Um a very, very capable contractor who, unlike in the UK, where you know construction companies, that's a hard business to be in, uh hard to do and hard to make uh really good returns out of.
• 53:34
  SPEAKER_00: In the Middle East, given the volume of growth, uh physical growth of buildings, it's a good business to be in.
• 53:41
  SPEAKER_00: And the it's a family business primarily, and uh the CEO, Bishoy Asmi, um, has a vision of diversifying the construction company to make it more robust in the future.
• 53:52
  SPEAKER_00: So not just be reliant on returns from the Middle East, because of course they can start and stop the way that actually gl other global markets do.
• 53:59
  SPEAKER_00: And build out a not a global, because it's you can't be everywhere all the time if you're a developer, but certainly build out a globally diversified development business by using the uh, on the whole, the equity of of the profitability of the construction company to create um a very strong, independent arm of development.
• 54:19
  SPEAKER_00: So to, you know, to go to be become the client as opposed to the contractor.
• 54:23
  SPEAKER_00: And again, when I when I was thinking of how I might spend my time, I was attracted by understanding how you know I've become used to working in global markets and looking at the deployment of capital based on returns, not based on geography.
• 54:37
  SPEAKER_00: And to be working with US organizations in the UK and Middle Eastern organizations capable of going in any market is i is interesting.
• 54:47
  SPEAKER_00: It means I still have my feet in London and I want to develop in London, I want my my backers to develop in London.
• 54:54
  SPEAKER_00: But ultimately, when I sit as a member of the investment committee, I'm looking at the returns for Cairo, for for Riyadh, for Dubai, for for London, for Toronto, because it's already an organization with a number of schemes globally, and we're looking at opportunities in in all of those markets.
• 55:09
  SPEAKER_00: But from a completely different perspective, and interestingly, I think we've talked about some of the the headwinds for London.
• 55:16
  SPEAKER_00: It is still seen as a tremendously attractive investable market for equity that wants to exit the Middle East.
• 55:24
  SPEAKER_00: There's no secret about that, not exiting for a negative perspective.
• 55:28
  SPEAKER_00: It's simply doing what all normal humans do, which is say I want to be invested in the best markets globally for the best returns.
• 55:35
  SPEAKER_00: And on the Warren Buffett principle, they like to invest in markets that they know.
• 55:40
  SPEAKER_00: And they know London and they understand London, and some of the headwinds are the things that now they are getting less understanding about London, which is why does this city make me feel less wanted when I come and visit than it used to?
• 55:54
  SPEAKER_00: But that can be overcome quite easily by spending time in London and realizing that uh whilst we have policies that make it more difficult, as a society we are as welcoming as ever.
• 56:08
  SPEAKER_01: I think you're right, because some of the PR around London and you know some of the negative press is just, you know, it does not reflect how it is on the ground.
• 56:16
  SPEAKER_00: Yeah.
• 56:19
  SPEAKER_01: Exactly.
• 56:20
  SPEAKER_01: Now, John, we're nearly out of time, but I can't imagine you have much downtime.
• 56:25
  SPEAKER_01: But how do you spend your downtime should you find yourself with a spare few hours?
• 56:30
  SPEAKER_00: I do.
• 56:31
  SPEAKER_00: Um I value the downtime as much as the upswing time in that sense, because what you can't do one without the other.
• 56:39
  SPEAKER_00: No family-centric families first always very fortunate to have uh very supportive family, but also one I'm trying to give back to more than being that distant uh sort of on the way to the airport person I was for many years.
• 56:52
  SPEAKER_00: So Helena, my wife, has always been incredibly supportive.
• 56:56
  SPEAKER_00: Actually, I I think similar to uh a number of I have a peer group that were all going through that same latter life career moment, and I'm not sure many of our wives or partners would like us to be around all the time.
• 57:10
  SPEAKER_00: So it's it's it's I'm sort of having an off-ramp to eventually being around all the time.
• 57:15
  SPEAKER_00: So uh they have been us a busy life, um a full life, and I don't want to get in the way of that, so I do need to keep being out.
• 57:22
  SPEAKER_00: But it's great.
• 57:23
  SPEAKER_00: Like Anna and Jane's my son, I I like to do I like to do a lot of things, and therefore I don't do many things well, do a lot of things badly.
• 57:31
  SPEAKER_00: So every form of sport or activity, you know, I love going to concerts, I love going to the theatre, I love golfing, I love fishing, I love travel is is amazing.
• 57:40
  SPEAKER_00: I've always travelled, therefore I really don't want to give up on that now, but it's more social than than business.
• 57:46
  SPEAKER_00: But of course, when I was travelling for business, it was hotel, taxi, airport, car, taxi, office.
• 57:53
  SPEAKER_00: There was no smelling the roses.
• 57:54
  SPEAKER_00: So I'm going back to all those places I went to but never saw, which is great.
• 57:59
  SPEAKER_00: There's there's a real bucket list around that.
• 58:01
  SPEAKER_00: And I think also ultimately I get a lot of personal value and sort of we might from a hobby, I get it from my work.
• 58:11
  SPEAKER_00: Uh because I'm learning.
• 58:12
  SPEAKER_00: So I never expected in this part of my career having to learn about things, because I am in most rooms the least qualified person now.
• 58:21
  SPEAKER_01: I'm not sure I believe that.
• 58:23
  SPEAKER_00: But when you're surrounded by the type of development managers that build the sort of buildings that the organizations I work with are in, they're incredibly talented people and they are facing opportunities and challenges that are totally new to me.
• 58:36
  SPEAKER_00: So I I think as one of the things you as an advisor, you be you get lulled into this false sense of security that you're an expert in an asset.
• 58:44
  SPEAKER_00: You're an expert in one small aspect of that asset.
• 58:48
  SPEAKER_00: And you know, the cradle to grave of acquiring the land and getting rid of the asbestos and then creating a great design and getting it through planning and then getting it through safety, and then finding a third-party investor who's going to give you hundreds of millions to build it, and then building it on time and and and then hopefully at the end you can release it, sell it, let it.
• 59:09
  SPEAKER_00: That is something that advisors never truly appreciate the depth and difficulty of that journey.
• 59:15
  SPEAKER_00: And I'm now seeing it with real experts, and it it's an education, it really is.
• 59:19
  SPEAKER_00: And hopefully it's making me a better advisor, even though my role is different.
• 59:24
  SPEAKER_01: Sounds fantastic, John.
• 59:26
  SPEAKER_01: Don't give it up.
• 59:27
  SPEAKER_00: I don't intend to.
• 59:29
  SPEAKER_01: So thank you so much.
• 59:31
  SPEAKER_01: Um, I really enjoyed the conversation, and we'll speak again soon.
• 59:36
  SPEAKER_02: Bye-bye.
• 59:39
  SPEAKER_01: Thank you so much, John, for giving us the benefit of your global perspective and for your candid comments on the UK real estate sector.
• 59:49
  SPEAKER_01: So that's it for now.
• 59:50
  SPEAKER_01: I hope you enjoyed today's conversation.
• 59:52
  SPEAKER_01: Please join us for the next Property She podcast interview coming soon.
• 59:57
  SPEAKER_01: The Property She podcast is brought to you by Mishcon Duraer in association with the London Real Estate Forum and can be found at Mishcon.com slash PropertyShe along with all our interviews and programme notes.
• 1:00:07
  SPEAKER_01: The podcasts are also available to subscribe to on your Apple Podcast app and on Spotify and whatever podcast platform you use.
• 1:00:16
  SPEAKER_01: Do continue to subscribe and let us have your feedback and comments and most importantly suggestions for future guests.
• 1:00:23
  SPEAKER_01: And of course, you can continue to follow me on LinkedIn and on Twitter at Property She for a very regular commentary on all things real estate, prop tech, and the built environment.
• 1:00:32
  SPEAKER_01: See you again soon.