1. A New Industry for a New Century
Commercial Property
A New Industry for a New Century
Property Litigation Association Conference
Liz Peace, Chief Executive
British Property Federation
8 April 2005 – Keble College, Oxford

2. “Property is theft” Proudhon 1860
An old industry with a bad reputation
“Property is theft”
Proudhon 1860
Sharks!

3. Government perceptions
Threat of lease legislation
Stamp Duty up to 4%
Closure of tax loopholes
Development Land Tax
Planning
Regulation

4. The Customers’ View
I am the LORD in landlord
You are the ANT in tenant
Anon
Occupiers remain frustrated by the adversarial nature of the property industry
Occupiers see the industry as ‘self-serving’ rather than customer serving
BCO survey 2005
‘On a day to day basis, UK landlords are typically uncomfortable to work with. Communication with landlords (which can be via the managing agent) tends to be very formal and invariably in writing’
RICS Tenant Satisfaction Index (39/100) Feb 2005

5. Investor Perspective Why Property? Too complex/too lumpy
BUT
Cost of entry too high
Too complex/too lumpy
No retail products
The preserve of the wealthy
Go for the easy BTL option
Source: IPD

6. But the industry is changing
Provider of occupier flexibility
Partner in urban and social renewal
Servant of the customer
Investors’ friend
Supporter of environmental sustainability

7. flexible lease lengths
Customers
flexible lease lengths
flexible lease terms
different types of tenure
sub-letting/assignment
speed and simplicity
a range of services
Landlord and Tenant Act Reform?
simplified lease
documentation
reduced
intermediary
involvement
basic business
advice

8. Investors £35 billion of potential retail investment
a BTL industry worth £40bn
Real Estate Investment Trusts
Authorised Investment Funds
simple structures/
speedy transaction
transparency and
information
consumer
protection

9. Government and Society
promotion of BIDs
participation in neighbourhood/underserved markets programme
partner in major regeneration schemes
funding infrastructure through S.106 agreements
novel forms of
partnering and
funding
faster, better
planning
simplified S.106
negotiations

10. Environment energy and utility efficiency – EPBD waste management
security
accessibility
safe, sustainable construction
modern forms
of contract
better, more
comprehensible
information
compliance with
spirit & letter of
environmental
legislation

11. a major contributor to economic growth - 6% of GDP
Government
The commercial property industry is:-
a major contributor to economic growth - 6% of GDP
a significant source of taxation - £30.5bn or 7.7% of total tax take
a creator of capital - £46bn per annum (30% of UK total)
provider of £85bn of investment for pension funds/savers
sound/swift
transaction
support
tax avoidance,
tax planning or
simply pay up!
corporate
governance

12. ? In conclusion environmentally sympathetic the industry is changing
the customer is becoming king
part of sophisticated capital market
a retail investment option
an urban regenerator
environmentally sympathetic

13. How do lawyers support this change?
providing solutions that are quick, simple and certain
managing expectations in an increasingly litigious society
avoiding litigation
taking a holistic view