What new challenges do you think the development sector is facing at the moment?
Aside from the wider economic outlook, from a technical perspective there are many challenging factors playing a part.
Post-Carillion, larger contractor’s appetite for risk has hardened. This is putting developers (and their funders) in a position whereby they are having to take on more risk than they would have previously. We have seen an increase in requests for mechanisms such as Brexit clauses and carve outs from liability that historically would have been readily accepted by the contracting parties.
Modular construction has generated a lot of excitement recently, but how the industry and, in particular development lenders, adjust will require a significant shift in the way deals are assessed. Fundamentals for lender underwriting, such as payment for off-site materials and ability to replace an incumbent contractor, are at odds with this construction methodology.
As an associate director at JLL, what do you see as the next step for the company?
For the company at large, I see the business continuing in its position as a global leader in real estate. The expertise within the business, as well as its global reach, means we are well placed to drive innovation for our clients and the industry as a whole.
In terms of our building consultancy team, we continue to expand our development monitoring service. Our cross-sector experience and exposure to the market means we have insight into developments ranging from £500,000 residential conversions, up to £500m-plus skyscrapers in the City.
We are increasingly seeing the benefit to our clients of offering a dual role in conjunction with our valuation teams. This approach provides our clients with enhanced service as we are able to work in a streamlined manner to holistically appraise the development proposals and produce a consistent, integrated service.
Do you feel there is currently enough consideration for the environment in the real estate sector?
Commercial viability will always be a key (if not the principal) driver for developers and with the transactional nature of the business, some sectors have lacked that long-term vision from developers regarding the impact on the environment. With the rise in leasehold, service-focused assets (PRS/PBSA/senior living), institutional investors are taking the long-term sustainability of assets far more seriously.
- DFT roundtable: Strong QS relationships, communication and resistance to tech during the evolution of a scheme
- An interview with Murray Holdgate: UK development finance sector will see banks 'start to come back' post-Brexit
- An interview with Patrick Davey: 'Today, lenders are much more focused on maintaining good underwriting standards'
I think the residential sector could look to the commercial sector for ideas in promoting sustainability credentials in marketing property. BREEAM, EPC ratings and WELL accreditation have long been high on commercial tenants’ agenda. Residential developers should shout about their sustainability credentials in marketing developments as people become more aware of their own impact on the environment.
Following the recent news that you’ll be aiming to make net zero carbon “mainstream” as well as operate at net zero carbon by 2030 in the UK, how does JLL intend to achieve this and how can the rest of the industry follow suit?
Our commitment to make net zero carbon mainstream in the UK real estate industry hinges on our desire to support our 4,000 UK clients to move to net zero carbon at pace and scale, creating a ripple effect of positive change across the industry. To do this, we are making a number of investments. For example, training our employees on net zero carbon buildings, sharing thought leadership and deepening our policy engagement.
In terms of working with our clients, we are seeking to create transparency by tracking net zero carbon assets in core UK markets to integrate net zero carbon thinking into our services and to provide consultancy support to at least 10 major clients as they develop their net zero carbon strategy for their portfolios in the next two years.
How did you get into the development sector?
After graduating in 2007, I secured a role at a residential lettings agency, which was an interesting time for that sector, dealing with many “accidental landlords”. From there, I registered on a surveying post-graduate course and subsequently got a job as an assistant in a specialist team advising lenders on public sector schemes.
More recently, I have provided technical due diligence and monitoring services on developments while at engineering firm WSP, and now JLL. I have been fortunate enough to advise on significant schemes, including Nobu Hotel in Shoreditch, the new City North development over Finsbury Park station and the purchase of the proposed ‘Gotham City’ scheme at 40 Leadenhall Street earlier this year.
If you didn’t work in development finance, what would you be doing?
Considering my chances of making it as a Premier League footballer are all but over (just), I couldn’t imagine not working in construction in some form, so I’d most likely be working in a trade. Growing up, I trained with my father as a decorator in the school holidays and I still enjoy trying my hand at a bit of DIY. Although given the quality of the output, my wife would probably tell you she’d rather I didn’t!