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Commercial buildings: “It’s all about value, not cost”

(Image: Sunny Landa, director at NG Chartered Surveyors)

It’s not often you’ll hear a commercial property agent quoting Oscar Wilde, but there is rarely a greater truism than the playwright’s famous “Nowadays people know the price of everything and the value of nothing”.

Wilde spoke these words in 19th Century, but the sentiment remains – especially in the commercial property sector in Nottingham.

For some time now there has been a growing trend amongst the local industry for undercutting of fees. Naturally, landlords are attracted to this, as it means they’ll get to keep a greater slice of the pie after their property is sold or let.

However, the practice of undercutting or lowering fees is not only ethically wrong, but also short-termism at its worst.

Landlords might be tempted down this cheaper route, but we’d ask: do you really think you’re getting value for money? There’s an old adage: ‘you get what you pay for’, and this is certainly true when it comes to instructing a commercial property agent to dispose or let your property.

If an agent is offering a landlord lower fees to try and entice them, the landlord should question who will be looking after the instruction? Will it be the seasoned, qualified property professional, or will it be a green graduate, eager but fresh out of university and woefully inexperienced in looking after a property portfolio. My experience tells me it’ll be the latter.

We’ve seen this is in the commercial property sector before; it usually happens when we’re coming out of recession and agents are battling it out to take advantage of a businesses who have a little more confidence in the economy and are looking to move premises.

This time, however, it’s a little different.

There has been such little speculative development in the last ten years that stock levels of good quality accommodation are incredibly low. Agents are fighting over instructions, and this is leading some to offer unsustainable rates.

While we can’t force developers to build offices and industrial units, as agents we mustn’t simply lower prices to maintain cashflow – that way lies madness, and sure fire way to devalue the industry and give it a bad name.

Surely it is better to offer a service that our fees warrant? At NG we don’t think about cost – we think about value. A landlord who is willing to pay the going rate to let or sell his or her property will get the best possible service. Can the same be said if s/he decided to take a chance on a cheaper alternative? I don’t think so.

At NG we pride ourselves on standing out from the crowd. We have a mantra of: “Our values decide our character; and our character decides our value”. Commercial property agents in Nottingham have a purpose of duty not to offer cheap alternatives which let down landlords (and ultimately occupiers), but to offer value on every instruction.

“Taking what we can get” can only lead to one outcome, and when we’re all in a desperate race to the bottom, not only does the image of our industry take a battering, but everyone loses out.
As Oscar Wilde also said: ‘Experience is one thing you can’t get for nothing’.

Written by Sunny Landa, director at NG Chartered Surveyors.
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Commercial property: Free-thinkers welcome

The only people for me are the mad ones, the ones who are mad to live, mad to talk, mad to be saved, desirous of everything at the same time, the ones who never yawn or say a commonplace thing, but burn, burn, burn like fabulous yellow roman candles exploding like spiders across the stars. – Jack Kerouac, On the Road

I’m not saying that life as a commercial property surveyor in the East Midlands is in any way exactly the same as Kerouac’s travels across America in the 1950s, but, just as the author was rightly lauded as a free-thinking ground-breaker, our sector is suffering from a dearth of truly creative thinkers – and this needs to change.

Recently, I was reading an article in an industry journal from Jonathan Goldstein, the CEO of financiers Cain Hoy, who was complaining that many now operating in the commercial property sector are now faceless automatons, obsessed with box-ticking, and replete of even a grain of creativity.

However, if companies such as his champion entrepreneurial spirit – why do they employ the services of the big corporate firms and not niche private practices?

Goldstein is correct that the surveying industry is dominated by grey-suited corporates and their surveyors are clones of their immediate bosses as much as they are of theirs. Evidence of this was very clear at 2015’s RICS East Midlands seminar where the great and the good were bemoaning the fact the industry is dominated by white males of in the 40-55 age range. There was much hand-wringing about how we can make the industry attractive to the younger generation.

The truth might be hard to bear – but they can’t if the status quo is maintained. The commercial property surveying sector is conservative by nature and conservative by design; it lacks any sense of forward-thinking and, broadly, isn’t seen as an either glamorous, exciting or colourful place to work.

Bigger agencies are, by design, less flexible; they are stuck in their corporate ways, answerable to faceless, unshifting, unambitious boards of directors who have been doing things the same way for years (and so why change?)

We’ve changed because we’ve had to. NG Chartered Surveyors has, since we started the firm, had a sense of individuality. We’ve strived to stand out from the crowd – partly because we have to – but also because of the ideas of our people. Our marketing has been niche, targeted and – gasp! – has often had a sense of humour – something we could never accuse some of our larger rivals of having.

We have to be market-clever because our budgets are a fraction of those of the big beasts. But we still turn heads, we still make people smile, we still deliver for clients over and over again.

The fact of the matter is: the property industry outside London resists flair and resists change. It doesn’t run with the mavericks like NG – even though it could get better results. To us both results and flair matters, but to most new entrants into the commercial property industry, flair is a foreign island.

And flair gets results. Off the back of our innovative marketing, we’ve completed some groundbreaking deals recently. At the Loft in Nottingham city centre, we let the second and third floor offices, achieving the highest rent in the Lace Market at over £14 per sq ft.

At Cinderhill Point NG has let a 26,200 sq ft industrial unit at £5.25 per sq ft – the highest rent for a unit of this size/age anywhere in Nottingham since the end of the recession.

Meanwhile, at Sycamore Pods Moorgreen we have achieved rents at £7.25 per sq ft, and at Stanton Forge we have forward sales ahead of project completion at over £100 per sq ft
Off the back of this we have been asked to bring our magic to Urquhart House in the Lace Market and 14 Park Row in the heart of Nottingham’s professional services quarter.

So, whilst we’re not exactly like the character in Kerouac’s On the Road, we’d urge any young people who are “tremendously excited with life” and who wants “the freedom of the road” to get in touch with us. As the book’s Dean Moriarty enthuses: “Somewhere along the line I knew there would be visions, everything; somewhere along the line the pearl would be handed to me.”

Written by Richard Sutton, director of NG Chartered Surveyors
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