Martin’s Properties News – 25th August 2022
I was recently asked what the difference was between working for a privately owned business versus a Plc. It is during times of challenge that the differences become starker. As a private business we can be fleet of foot – reacting quickly and sometimes unconventionally. The property market is undoubtedly cooling, transactions are falling off, and the depth of market across all sectors is diminishing. Many Plc’s would pause the deployment of cash until it is clear as to which way the winds are heading and what the market is doing. For us it is a time to consider opportunistic strategies and investment – doing something different to others in order to generate returns that are different to average.
Steering the ship of a privately owned property company with seventy-five plus years of history behind us, this will not be the first, nor sadly the last, storm that we need to weather. The saying ‘make hay while the sun shines’ has proved wise this year as the sun has beaten down leading to bumper crops, but for privately owned companies like ours, we operate with a view to the long-term strategy for growth and yield returns. The team meet face to face weekly and the Board meet with the shareholders monthly to continually review, assess and feedback. We have the long term objectives of current and future stakeholders in mind with every transaction. Therefore, no matter the market we take a long term and sustainable view to our investments ensuring they work for our business today and secure the future of the business in years to come.
With this in mind I enter my board meetings with a different perspective to the current challenges facing the market. An area of the market that still represents good value in the long term is retail, and it is a sector that we know well. The changes to Class E offer landlords the opportunity to interchange between retail, F&B, offices, gym, creche, healthcare or medical without the need for planning consent. This helps to offer downside protection and to future proof retail investments as High Street trends fluctuate.
Town centres with good accessibility and affluent residential catchments will continue to be a destination for consumers. The key for investors and multiple landlords is to have a common goal – curating an experiential offer through a mix of uses to attract consumers and provide a reason to stay and visit the units throughout the day and evening. Class E now offers the flexibility to meet changes to consumer demands relatively quickly.
The success of Pavilion Road in Chelsea and much of Grosvenor’s retail estate has been through the creation of ‘old fashioned’ High Streets serving the local community, the theory being if you create a space where locals want to be, visitors will follow. The most successful High Streets have seen the return of the butcher and baker but one High Street stalwart that is slowly migrating online is the High Street bank. As we move to a cashless society and even pay in cheques via mobile banking, the need for large baking halls in prime town centre locations diminishes. Banks have been part of the make-up of our High Streets since the 17th century, often occupying the largest and best pitches in prime town centre locations. They are almost universally in the most characterful buildings on our High Streets. As more and more banks move online, the opportunity to repurpose these buildings into honeypot fashion and F&B premises is something that looks to be an appetising investment both in the short and long term.
Richard Bourne, Managing Director