Expanding a commercial property portfolio means managing a complex mix of ingredients: sites, costs, suppliers, legislators and stakeholders of all sorts.
Undeniably it is a technical challenge. Get it right, and you may just have a showstopper.
If you’ll forgive the Great British Bake Off analogy, there is definitely something of a master baker mentality required to get the best results. Real estate professionals - like bakers - can easily line up all of the right ingredients, but get the blend or timings wrong and the result could be very soggy indeed.
As we continue our growth plans (targeting 85,000 UK Premier Inn bedrooms by 2020), we are seeing some interesting challenges when it comes to property, planning and perceptions. We are buying a higher proportion of freehold sites than ever before as we look to get into the very best locations and, in many cases, this means acquiring redundant office buildings and applying for change-of-use planning consent to breathe new life into them.
Our team is well honed when it comes to the property and planning elements: we target and purchase the sites that meet our criteria and we put together robust planning applications that tick all the technical boxes. Where it gets interesting is on the issue of perceptions.
Premier Inn - like any well-known consumer brand - is widely recognised, but means different things to different people depending on their familiarity with the product. People that stay in our hotels will have their views. Others who know the name but not the customer experience are likely to have different opinions. All of this means that when it comes to getting the green light from a local planning authority, the individual perceptions of those committee members really count.
Before I joined Whitbread and the hotels sector, I worked in food retail and supermarkets. We faced similar attitudes towards quality, suitability and, crucially, jobs. There is a view in some quarters that a job in a service industry is less credible or valuable than an office-based or manufacturing job. We believe that is wrong and we are working hard to change that perception.
Whitbread is creating 3,000 new jobs per year. We invest in people, and many who join us in entry-level positions progress to management. We also recruit around 50% of our new team members from NEETs (not in education, employment or training) and the long-term unemployed. And, alongside the jobs we create directly, we support local economies and communities through the spending power of the customers we draw in and the underpinning value to towns and cities of having good hotel stock.
My point is that people trying to expand into and invest in property portfolios and property-dependent businesses like ours - and bringing an economic stimulus as they do so - should be able to have confidence that preformed ‘perceptions’ will not undermine the true worth of serious and credible planning applications.
So when investors and applicants present their offerings to be ‘judged’, what is needed is an open-minded and discerning assessment. Not every planning application put forward will be perfectly baked, but many will be. Better to taste and see for yourself than to prejudge with one’s eyes. A jobs-and-investment base with an economic-boost filling and a dollop of confidence on top can be a very tasty cake indeed.
Mark Anderson is managing director - property, commercial and Premier Inn Germany at Whitbread Hotels & Restaurants
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