19 March, 2020

7.30 AM on a wet and windy Tuesday morning and I’m boarding a Central Line train heading east. More empty seats than usual today and the face mask count has been gradually increasing as people take more visible precautions against Covid-19. Sitting wedged between a soggy umbrella and leg spreader, my inbox pings. It’s a check-in reminder for my flight to Nice long since refunded; no doubt I’m not alone.

MIPIM 2020 Quote CardThe exciting buzz of La Croisette fills my mind. I can almost feel the warmth of early spring sunshine on my face, the smell of freshly prepared coffee drifting on the Mediterranean breeze and the taste of a crisp, buttery croissant. I’d organised a packed schedule of meetings, lunches and dinners for MIPIM, all opportunities to speak with my private equity, fund management and institutional clients. They were all keen to find out what we’ve been up to during the busy last quarter of 2019 and understand the new ways we’ll be able to help them this year.

Whilst travel restrictions have derailed my meeting schedule, the broader impact on the UK real estate market appears muted so far. We’re continuing to help clients find a way through the practical difficulties of site inspections and face to face meetings, as well as helping them make sense of what these unprecedented circumstances might mean for them. Our experience and expertise are needed more now than ever. In a time of economic and social uncertainty for anyone involved in buying and selling investment real estate, effective Technical Due Diligence is imperative, especially given the volatility of the other factors that determine property values. Whilst we’re always focussed on an intelligent analysis of current short or medium terms issues, we’re also looking at longer term impacts. 

At the same time, we can’t allow ourselves to be distracted from the growing impact of climate change on investment property. We’re already busy assessing the future risk to the performance of buildings from more volatile and unpredictable weather patterns. By adding specialist environmental and mechanical & electrical engineers to our TDD teams, investors get the benefit of new insights and new strategies, so they’re able to learn how to adapt their assets to meet changing weather conditions. We’re finding ways to use maintenance cycles more intelligently to implement effective building improvements that enhance resilience.

The appetite for real estate platform deals look likely to continue as more investors look for larger scale opportunities. Last year we worked on the disposals of the Green REIT and IQ Student Accommodation portfolios, and also represented the purchasers of BMI Healthcare and a number of European logistics portfolios. Through assignments like this we have been able to develop our TDD approach so we can advise on the largest transactions anywhere in EMEA. Few others have our reach or expertise in this area. The lessons we’ve learnt continue to provide a valuable resource of insights to our clients in all the markets they’re active.

Combustible cladding continues to be a cause of uncertainty and is threatening a proportion of market transactions. Our specialist facade team has been helping steer clients through emerging legislative changes, the best approach to fact finding and intrusive investigation, followed by the development of remediation strategies; as ever our overriding objective has been to protect underlying asset value by giving clear advice and reducing uncertainty where possible. This approach has helped our clients unlock debt funding or obtain insurances, both of which in other circumstances might have delayed or halted a transaction

Demand for technology in buildings is a complex, fast changing issue that we’re helping to simplify. Our clients recognise they need to be doing something but are often not sure what. Technology evolves so quickly; the next best thing today could be redundant tomorrow. Everyone is talking about ‘smart’ buildings, but there isn’t a single industry definition. One clear direction is the use of digital technology to collect more sophisticated data about how our buildings perform. Our Geomatics team uses the latest measurement technology to build digital twins and 3D models of any building, both powerful tools that allow owners to access real time data to optimise energy use and costs in use. Critical in a competitive occupier market.

All of a sudden I’m at St Pauls and snap back to reality – back at ground level it’s still raining but I can see glimpses of blue sky. UK real estate fundamentals remain firm and there is business still to be done.