There seems to have been a welcome shift of perspective this week with a growing focus on how we emerge from lockdown, along with encouraging feedback that there is life after lockdown from places such as the Czech Republic where a phased exit plan is seeing shops, businesses and sports facilities starting to reopen.
At Mishcon de Reya, we were delighted to announce this week the opening of our new Singapore Office. The branch office will initially focus on delivering legal services to high net worth families across South East Asia. As our Executive Chair Kevin Gold put it, ‘having a physical presence here represents our commitment to both Asia – a key growth area for our firm and the world - and its people, and will be key to enabling us to build meaningful relationships with our clients and intermediaries’. I look forward to being able to visit.
In other news, I caught up with IPSX’s Kevin Marriott who I was due to see at MIPIM. He told me that IPSX have recently launched an entirely new product called Wholesale, a FCA regulated stock exchange for commercial real estate assets with a minimum value of £100m. It provides a new UK regulated onshore public market for real estate in a corporate form including as a REIT. No doubt we will be hearing more about this.
It was poignant to record a MIPIM Connect panel on ‘building value through social engagement’ as we had intended to present this session live in Cannes in March, until Covid-19 intervened. I was delighted to chair a lively and engaging digital panel with our original line-up of Savannah de Savary: Founder and CEO of Built-ID, Felicie Krikler: Director of Assael Architecture and Thomasin Renshaw: Director of Development, Grosvenor Britain & Ireland. What an inspiring group of multitasking women who are running their businesses in lockdown whilst also coping effortlessly with child and/or pet care not to mention the technical challenges of recording our session.
Watch it if you can for some really insightful comments from the panel.
The consensus was that more collaboration and diversity are needed in order to overcome the public’s lack of trust in developers as highlighted by Grosvenor’s survey published last year, which found that 98% of the general public don’t trust developers. And, look out for de Savary’s suggestion of a ‘crème de la crème’ standard for developers to aspire to.
As I said in my panel introduction, the world is facing unprecedented change and uncertainty and I keep thinking of the Lenin quote, “There are decades where nothing happens; and there are weeks where decades happen.” The last weeks have seemed very much like that. As difficult as all this is, the upheaval does provide us with a once in a generation opportunity to change things, to reshape real estate and perhaps do things differently.
Thinking about MIPIM and Cannes made me a little nostalgic. I have attended every MIPIM since the event began and do miss the ability to meet up to exchange news and views with real estate clients and contacts from all over the world. In fact, I could write a book about some colourful episodes and characters I have encountered at MIPIM over the years.
This line of thinking prompted me to check the Property Week website, which helpfully lists all the columns I have written for them over a period of almost 20 years. They made interesting and relevant reading, particularly the piece I wrote in the run up to MIPIM towards the end of the global financial crisis about all the reasons not to cut marketing costs in a recession. These merit a reread as exactly the same logic applies in the current crisis. Now as then, ‘reactions to the recession vary widely.
Advertising agency M&C Saatchi concluded at the time that we fall into eight distinct types, each adopting a unique financial coping strategy. Characteristics include approach to risk, debt and short/long-term focus. Groupings range from ‘crash dieters’ – the 20% of all adults that cut out all non-essential spending – to ‘vultures’, who, at only 4% of the population, are the smallest but most distinctive group. They ‘love a good economic crash’ and, while others bemoan the economy, carry on spending and rooting out the bargains’.
It is still the case that although cutting marketing budgets is an instinctive reaction to a downturn, it can cause long-term damage. Harvard Business School guru John Quelch warned at the time that a downturn is no time to stop spending and successful companies adapt rather than abandon their marketing strategies. And Moray MacLennan, worldwide CEO of M&C Saatchi, and then IPA president, said ’you can’t expect corporates to prioritise three years ahead while struggling to survive the next six months. He acknowledged that ‘if sales decline, then marketing spend will follow’, but the key factor is to maintain market share – this can be achieved at lower cost in a downturn. It may be a good time to reread this column.
We have a Bank Holiday weekend coming up, although my outlook diary is stubbornly insisting that the early May Monday Bank Holiday went ahead as normal! It has of course been moved to Friday May 8 to coincide with Victory in Europe Day marking the 75th anniversary of the end of World War II in Europe. Friday was intended to be the first day of a long weekend featuring numerous commemorative events across the country, which will have to be held, as best they can, on zoom.
Susan Freeman is a partner at Mishcon de Reya