Adaption: a universal challenge
I love my job. Last week I spent a couple of days at MIPIM, meeting new acquaintances and old friends in the sunshine of Cannes and as we speak I’m whizzing up the east coast of England on my way to Darlington in the beautiful County of Durham.
Two very different environments, but with much in common. The annual property jamboree on the Cotes d’Azur was a masterclass in creating a space for businesses, local governments and national politicians to assess: what the current state of the market is, how it will fare in the impending turmoil of post Article 50 politics, what impact increasingly disruptive market participants will have on traditional business models and also our industry’s wider societal role in a paradigm where there is increasing mistrust amongst most people and big businesses.
And in a few hours I’ll be presenting to Darlington Council, local business leaders and other stakeholders on the UK retail market...
...before supporting a workshop aimed at exploring how change should be embraced in the council’s vision and plans for retail investment and placemaking. 1,100 miles. Same challenge: adaption.
For our part, last week we were delighted to be working with the Department for International Trade (DIT) as part of UK Government’s presence at MIPIM. At the event, in a big way, for the first time ever, there was a wonderful irony given the results of last June. Nonetheless the Department should be commended, and hopefully will build on what was a success.
I was joined by UK retail property luminaries including Giulia Bunting (Director, GL Hearn, President, Revo), Peter Cole (CIO, Hammerson) and Paul Sargent (CEO, Queensberry) at a session I chaired where we traversed our way along the sinuous path of what makes the UK attractive for international retailers and investors (building on our recent research with leading REIT intu). And of the many points that were made, the area raised by Paul that I have believed for a while is of most interest is the mix-match in the speed of adaptation within the different parts of our ecosystem.
We face an enormous challenge to align the speed of change within the different parts of our market so it operates more productively in the future.
Consumers and retailers, driven by technology and flexible business models (where barriers to entry are low, and where the ease of exiting is beneficial) are rapidly changing the way they buy, produce, sell and communicate.
Property people and local councils operate in more static systems that suppress adaptation.
The Landlord and Tenant Act is colloquially known as ‘the 1954 Act’. The business rates system seemed a sensible way to tax local business… in 1990. The Use Class Order deliberately restricts uses and shapes much local planning policy. Retail property assets are valued in much the same way as they always have been. And once buildings are built, they stay built for a long time (in most cases, thank goodness!).
I strongly believe this is a systems issue, more than a lack of human desire to embrace change (whilst not being naïve enough to think this isn’t part of the problem) but I am also confident with more collaboration in places like Darlington and Cannes, persuasion and willing we can improve how we all do business.