Planet Property, the eagerly anticipated exposé of the UK property industry from 1997 to 2012 by former Estates Gazette editor Peter Bill, lives up to expectations. But how could it not? The author has often explained to me when I have complained about word count limitations that a real writer is able to depict a personality in just one word, as the best cartoonist can create a character in a pen stroke. We’ve even tried it from time to time!
A well-honed journalistic talent, together with a ringside seat from which to observe the inhabitants of Planet Property at close range over a key period for real estate, make for an incredibly informative and entertaining read. The experience is enhanced by the author’s irrepressible humour laced with a dose of irreverence. For example he says ‘there is no easy way to describe CMBSs’ (commercial mortgage-backed securities) so quotes a definition from the US Mortgage Bankers Association which he deems ‘almost comprehensible, if read very slowly twice over.’
This volume – I read it in one sitting as I couldn’t put it down – should most definitely be prescribed reading for anyone involved in UK real estate. Apart from anything else, we all need a reminder from time to time that property is cyclical and despite Gordon Brown’s declaration to the contrary, bust always follows boom.
Honorary mention in dispatches
I am honoured to be mentioned in ‘Acknowledgements’ and to play a cameo role in my introduction by Mr Bill to the Duke of Edinburgh at the Estates Gazette’s 150th Anniversary Dinner at St James’s Palace. However I do need to set the record straight and explain why the Duke responded as he did. All was going swimmingly as Peter correctly introduced me as ‘Susan Freeman, a property partner at Mishcon de Reya’. Unfortunately, as we were poised to shake hands, Peter could not help but interject with perfect timing into the silence, ‘you’ll have heard of them!’ I would like to think that it was the helpful prompt to remind that my firm had acted for Princess Diana in her divorce that prompted the barbed retort ‘you do that as well as all the other stuff do you?’ Anyway, no hard feelings as I have since served for some years under Peter’s able chairmanship on the Duke of Edinburgh Awards property committee.
The book is a cracking good read. Even more so when you know some of the characters involved. Interspersed with the narrative are many of Peter Bill’s Estates Gazette leaders which, seen in context and especially with the advantage of hindsight, are in many cases particularly prescient and give a real insight into sentiment in the sector at the time. For instance the 1999 leader on the e-tail revolution highlighting as ‘the good news’, the demand for distribution space for online businesses and ‘the bad news’, ‘the cloudy fate’ of high streets and shopping centres in 10 years’ time. Also the leader dated 23 August 2008, just three weeks before the collapse of Lehmans, headed emotively ‘Bubble Blown by Bad Banking Practice’ in which the ‘doomed US bank’ even gets a name check. Spot on Mr Bill!
Peter charts the build-up to the biggest property crash in history and records that it was the irrepressible Helical Bar CEO, Mike Slade who spoke out at the EG/APB Conference in September 2004. In the face of rapidly escalating volumes of debt being pumped into property by the banks, he warned against debt driven buyers inflating prices to unrealistic levels. ‘These new boys have been making merry with your money. We may be missing a trick, but personally I don’t think so.’
Estates Gazette editor Damian Wild has already noted the most frequently mentioned in Planet Property in a recent editorial. Land Securities trumps British Land but Sir John Ritblat outscores Francis Salway, was his assessment. It’s also intriguing to note who isn’t there. You can’t mention all inhabitants but to my mind some notable absentees are ‘Black Jack’ Dellal, Dawnay Day (who came and went during the period), Manhattan Loft and Urban Splash who first brought brand to Planet Property, the cycle riding (in every sense of the word) David Pearl. Also listed developer Development Securities don’t seem to have a mention.
Despite the observation that the sector is still predominantly white middle class and male (ie not noted for its diversity!) and Gerald Ronson’s quoted comment ‘the degree of arrogance in the property business is higher than in any other industry I know’, it is a sector crammed with colourful and convivial characters brought to life in the pages of Planet Property. In fact, despite the limitations, a more diverse bunch it would be difficult to find. Peter Bill correctly points out that on Planet Property it’s the unwritten rules of the game that matter most and connections are of paramount importance.
The comments about old boys’ networks and circles of influence are fair enough but I have to take slight issue with Peter’s comment that ‘old girl networks barely exist.’ True Planet Property is not overrun with women but there are a number in positions of influence, some even mentioned in the book, and these networks quietly exercise power and influence behind the scenes. Many a journalist has tried and failed to identify members of the infamous Diamond Club.
Tribes and brokers
The largest tribe on Planet Property is of course the property agents. Peter explains how he used to carefully warn celebrity presenters at the EG Awards that the words ‘estate’ and ‘agents’ can never be used consecutively without causing offence. Endearingly, he goes on to refer to Lord Samuel, founder of Land Securities, as ‘the Finchley-born former estate agent.’ Stuart Lipton is also described as ‘skipping university to become an ‘estate agent’. Hmm! In a later section explaining the twin planetary system of residential and commercial, Peter writes that ‘trading in second-hand homes is carried out by estate agents generally operating in a world apart from those who broker commercial property.’
The book discusses the power wielded by individual deal brokers and the ‘broker as kingpin’ scenario which is more extreme in the US. Mention is made of the ‘very topmost’ New York broker, the legendary Stephen Siegel. This takes me back to my stint at CB Richard Ellis whose organisational changes were the subject of my London Business School MBA dissertation in 2001. I was given carte blanche by their enlightened CEO Alan Froggatt to interview anyone I wanted to and was lucky enough to catch the celebrated Steve Siegel on a flying London visit. He had been described to me by a perceptive insider as being ‘like Anthony Hopkins, playing Richard Nixon, playing himself’ and he didn’t disappoint. At the end of the interview he interrogated me and decided my talents were wasted as a lawyer and that I should try my hand as a real estate broker in Manhattan. I didn’t and, reading Peter Bill’s description of the star New York brokers such as Mary Ann Tighe and 6% brokers fees prevalent at the time, I clearly missed my vocation!
New Property v Old Property
A particularly poignant episode for me is the retelling of the story of the historic 2000 British Property Federation (BPF) conference in Brighton. I don’t think I fully appreciated the significance of the event at the time even though I was on the Steering Group along with the late Ron Spinney, then President of the BPF. I recall being keen to shake things up a little and contributed to arranging the panel with Helical CEO, Mike Slade and FT property correspondent Norma Cohen.
Peter describes that session as Old Property coming under attack from New Property in the form of Nick Leslau standing up and declaring ‘The Viagra this industry needs is disclosure’. I was sitting next to him and can confirm that the statement did cause a ripple of shock in the room. Norma Cohen then went into the attack and Mike Slade called on Ian Henderson, then CEO of Land Securities, who was sitting quietly in the audience, for a response. It was an unusually riotous conference session which I thought had gone rather well. I do remember Ron Spinney’s muted response when I subsequently asked what feedback we had had from the conference. ‘Mixed’ he said after a long pause.
Find the customer
A comment by Ian Coull, former CEO of Segro from 2003 to 2011, that particularly resonated with me was that when he joined from Sainsbury’s he found it extraordinary that there was a complete absence of any customer service in the industry. This mirrored my thoughts after graduating from London Business School in 2001. Having discovered that businesses are obsessed with serving their customer, I was surprised that on Planet Property landlords didn’t see their tenants as customers to be looked after and nurtured. Things have changed but largely because of the market and the demise of the 25 year institutional lease. Maybe I should have listened to Regus founder Mark Dixon who told me he learnt about business working in a sandwich bar and that would be far more useful to me than an MBA.
Insights and information
Planet Property contains a wealth of insights and information for real estate aficionados including an invaluable breakdown by Tony Key of Cass Business School of the UK’s £385 billion commercial property. Unsurprisingly 25% (£95 billion) is now owned by overseas investors. Surprisingly when you consider their influence and profile in the industry and percentage of the book devoted to them, only 15% (£59 billion) is owned by listed property companies.
One chapter is devoted to ‘politics, planning and taxes’ and gives a most illuminating overview of the machinations of government. It makes you wonder how anything actually happens.
There is so much more packed into Planet Property so get your copy and start reading so we can discuss it. I’m mortified to find that my comments are almost as long as the opus itself. Clearly I should have taken heed of Peter’s invaluable advice!