Collaboration between developers and local authorities is key to regenerating regional towns and cities, according to Bruntwood’s chief executive Chris Oglesby.
Speaking to Blackstock Consulting’s Andrew Teacher in the latest episode of our BossCast series, Bruntwood’s chief executive Chris Oglesby admits that repairing neglected town centers is a challenge, but it’s a mission that Bruntwood is committed to.
Speaking about the scale of the challenge, he notes: “The real estate industry and local authority leaders have between them conspired to ruin our town centers since the 1970s. The town center is the center of its community, and we need to reposition real estate to drive the demand that makes those communities again.”
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Creating social value sits genuinely at the heart of Oglesby’s vision for the company, and while this has become common parlance at many boardroom tables, for Bruntwood, it has translated into genuine activity visible in its various partnerships.
“What you see time and time again is a traditional propco who understands that they need to partner with a local authority and then try and reverse engineer something into the business that isn’t part of their DNA,” Oglesby says. “Whereas for us working in partnership has always been part of the way in which we operate.”
The way to do this, Oglesby argues, is flipping traditional priorities on their head. “So much of the real estate industry has just focused on the supply side,” he remarks. “When you are focused on driving the demand, then working in partnership is necessary.”
Partnering with local authorities for Bruntwood “isn’t about making a fast buck and then disappearing”, Oglesby says, but instead forms a consultative process that makes sure any development is driven by demand from the local community – an approach that’s clear in its work with Trafford Council. According to Oglesby, this approach ensures town centers are developed for their local communities.
Looking to the future, Oglesby argues this model of urban regeneration will form “the next phase of the renaissance of our regional cities following post-industrial decline”, as innovation districts driving the fourth industrial revolution are supported by a network of liveable towns that in turn sustain the labor market. In this way, regional cities can be viewed as “a network of villages and towns that are fully interconnected.”
These innovation districts, alongside “hyper-local community-led development”, are currently the two main drivers in the commercial real estate market according to Oglesby.
As such, Oglesby prefers to talk about innovation districts rather than pure life sciences parks – noting that Bruntwood’s Alderley Park, formerly AstraZeneca’s research headquarters and now the UK’s largest single-site life sciences campus, has a 75/25 split between life sciences and tech.
When Bruntwood initially invested in the life sciences, Oglesby says, it wasn’t because it was tipped as a “hot investment sector”, but because the economic growth that stems from the sector helps regional cities thrive.
“We’re not buying property solely because we believe there’s demand for it - we’re working with cities to create that demand,” he adds, explaining that there is a huge opportunity to generate significant social value through responsible investment. This began with the purchase of the former National Computing Centre on the Oxford Road corridor by Manchester University in 2003, which Oglesby chalks down to “having our eyes open” and noticing the early signs of the growth of the tech sector in the area.
The company has come a long way since then, having recently signed a £1.5 billion development deal with Manchester University to create the ID Manchester campus on the site of the former University of Manchester Institute of Science and Technology (UMIST), a 4 million sq ft development that includes a spend of £28 million solely on the public realm. “The most interesting thing about it isn’t the real estate – which is fabulous,” Oglesby comments, “It’s the partnership with the university.”
The deal involves the university retaining a 30 percent shareholding in the development and keeping equity in the land value.
Bruntwood’s involvement in life sciences and tech goes beyond the typical landlord-tenant relationship, Oglesby explains. “Access to skills, access to funding, and access to the network” are three core benefits the company offers the customers in their innovation districts.
“Once you’ve aggregated Manchester, Leeds, and Sheffield, there are more spin-outs than are coming out of Oxford or Cambridge,” adds Oglesby, noting this increases the investor to investment proposition ratio – ultimately making these cities more attractive places to base a company.
Having ridden a way of growth across the North West, he also tips Birmingham, particularly the wider West Midlands, as an area with enormous opportunity for technology-driven growth and innovation.
Bruntwood has two large projects in the area. Innovation Birmingham is a 100,000 sq ft tech-focused innovation district and it also has a 10-year, £210 million development agreement with the University of Birmingham for a life science-focused health innovation campus.
On the topic of offices, Oglesby argues Bruntwood has been similarly ahead of the curve by operating serviced offices since the 1990s.
“Start with what the customer wants and evolve your product for it,” he says.
“I wrote my first mission statement when I took over as chief executive in 1999. It was to provide the best value office space with the highest level of customer service in the regional cities for the long-term health of our colleagues, customers, and communities. Those three Cs have been driving the success of our business ever since.”
Bruntwood – as many other landlords are now looking to – believes it can provide high levels of service direct to occupiers by offering a blend of different types of space – without the need for a third-party operator like WeWork. The result is a granular income stream that banks see as lower risk, according to Oglesby.
Looking forward, Oglesby sees this direct-let, serviced-office model forming one arm of the bifurcation of the office sector in the post-Covid world. “Offices will end up with a number of owner-operators as well as a fragmented model,” he predicts. “I just think that, for many companies, the traditional leasehold model is one that doesn’t work.”
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