Andrew Hay on market crises, the importance of passion, & handing over the reins at Knight Frank

By PrimeResi Journal

Lord Andrew Hay has retired from Knight Frank after nearly 40 years. Here he talks to PrimeResi about his future plans, the future of Knight Frank (with some big changes ahead), and how to weather another global market crisis.

Having led the UK and global residential property agency, Lord Andrew Hay has just retired from Knight Frank after 37 (or 39) years.

Raised on the Isle of Mull in the Hebrides, the property industry doyen originally joined Knight Frank & Rutley back in 1981 – but was sacked (twice) before getting into the groove properly in 1983. He started out in estate sales on a salary of £3,500 a year, working his way up to Associate level in 1990. He moved to Head Office in London, working in the national Country sales department for a solid 25 years.

Hay became the KF’s youngest Residential Equity Partner in living memory in 1997, stepping up to head the National Country House Sales team. Since then, he’s helmed the super-prime sales team and led the high-profile Global Property Wealth team, which handles KF’s richest of the rich clients and contacts – including over 670 billionaires.

He’s been over-seeing both UK Residential and Global Residential matters for Knight Frank since 2012 (responsible for London and Country sales and lettings, resi development, consultancy, and KF’s buying arm The Buying Solution), and was also Chairman of Knight Frank Finance.

Today – 1st April 2020 – is Hay’s first as a former Knight Franker.

The business saw extraordinary growth under his watch. The UK arm has ballooned by 90% in the last eight years, while – in Hay’s words – “the global bit has gone nuts”; revenues from the Asia Pacific region, for example, now exceed UK income.


Hay’s dual role – Head of UK and Head of Global Resi – has now been carved into two, handing domestic responsibility to former London chief Tim Hyatt, and the global gig to former resi development boss Rupert Dawes. Carrying two such massive jobs “wasn’t sustainable”, admits Hay, who would start his days at 4.30am and spent an average of ten days each month on overseas trips.

Retirement was always going to come this year: all Knight Frank partners step aside at the start of the financial year following their 60th birthday; it has always been so. It’s a topic that gets debated every few years, but “the benefits outweigh the negatives by about eight to two,” says Hay. “You make way for new ideas, fresh legs and new talent.” The certainty of the date means that any handover of power should be smooth – even in the face of the current global pandemonium.

That handover process started back in October, and has been “an utter joy,” beams Hay.

Hyatt steps up from being KF’s Head of London, having previously been Head of Lettings. He oversaw a dramatic increase in the lettings business, shifting it from a £2.5m sideshow into the firm’s biggest sub-division by turnover. “He’s literally delivered record year after record year,” says Hay. “Tim is incredibly good at making things run full tilt.”

Dawes has been a Knight Franker since 2003, with stints as Head of New Homes, Head of Resi Development, and now Global Head of Residential (taking over the reins in October last year). Dawes “has already had a huge impact in China,” says Hay. “The success we’ve had there has been down to the work he’s been doing in the last year.”

Knight Frank managed to do more deals out of China in January and February – in the middle of the Chinese Coronavirus lockdown – than were done in the previous year

And it has been some success… Following “a heck of a lot” of investment over the last two years, Knight Frank managed to do more deals out of China in January and February – in the middle of the Chinese Coronavirus lockdown – than were done in the previous year. “Now how’s that?” exclaims Hay; “Amazing. And that is all online, buying off-plan with digital transactions.”

Not all of the new leadership has risen through the Knight Frank ranks, as Hay did. Outsiders Rory Penn and Thomas van Straubenzee took over Global Wealth Office team in 2018, and “are thriving”, says Hay, who handed over precisely 1,434 very wealthy clients to the duo. “They have blown through their financial projections.”

Hay will not be on call to give ongoing guidance to his successors; “absolutely no,” he laughs; “that would be a nightmare.” But he does offer some parting wisdom: “My advice to them is: they have got to be passionate; they have to be clear what they want to do; they have to communicate it well, and they’ve got to enjoy it.”

What makes a great property agent?

“Passion is an incredibly overused word, but if you want to be the best in your market or the best in the world, you have to be absolutely passionate about it.” – Andrew Hay


Immediate retirement plans have unfortunately been scuppered by the Covid-19 pandemic. Hay spent some of the last 15 months plotting a 1,000km solo trek through France and Spain, leaving tomorrow, raising money for the Rainbow Trust children’s charity. The global lockdown means that has been postponed, probably to August – but a JustGiving page is still taking pledges.

“The plan was so to decompress from Knight Frank, and also get over the bereavement of leaving,” explains Hay. “If something has been a part of your life for 37 years – and it’s been a big part of my life – it’s quite a shock. So I needed something that would give me a daily goal, a purpose, raise money, get fit, and do my next business plan.”

“I’m not moving a million miles away”

Details of that next business venture are strictly under wraps for now, but sound intriguing. “I’m not moving a million miles away,” he teases with evident excitement. There’s “a five to seven year plan” in place, involving two new roles (again): one “in the high net worth space”, and another in real estate; “they are both linked,” he says, suggesting that things should be up-and-running by the Summer.

Hay has also just secured planning permission to build a house near Chipping Norton in the Cotswolds, where he has a farm. “To be honest I’m just going to look at some plans and my wonderful wife is going to run the project,” he says. Designs are “pretty traditional on the outside, but the house is incredibly modern on the inside.”

From Big Bang to global crises

Lord Hay started his career at a good time, in the early Eighties. “I caught the front of a wave, like everybody in my generation did,” he says. Margaret Thatcher’s “Big Bang” made making money fashionable and put property ownership back on the main stage. “That was a seismic change” for the property market, he says; “Big Bang was on the good side, but there have been some bumps in the road along the way.”

“I caught the front of a wave, like everybody in my generation did”

We’re in the middle of one of those bumps right now. The Coronavirus pandemic has largely shut down prime property markets around the world, but Hay – speaking a week before the UK went into lockdown – seems generally sanguine about events.

The industry veteran has weathered some wild market turbulence over the last 37 years. “We had a dreadful storm in ’86 on a Thursday, followed four days later by Black Monday,” he remembers; “that was pretty catastrophic. We had another big shock in ’91, then we had 2000 and 2001 with the World Trade Centre; that stopped the world for six months. And then of course not long after that, in 2008/2009, we had the Global Financial Crisis. There’s always something. And between all these you got elections, devaluation, SARS, bird flu… When I look back over 37 years, there hasn’t been five-years when there hasn’t been something.”

“Real estate is always a good asset. Time after time, in all the hullabaloos I’ve been through, real estate does really well”

With much of the world in lockdown, the current Covid-19 pandemic is clearly serious. Hay – speaking before things really escalated in the UK – anticipates “probably three months of disruption” before markets get back to a semblance of normalcy. “The hardest thing is reassuring people in the firm, particularly young people, that the world is not coming to an end,” he says. “Real estate is always a good asset. Time after time, in all the hullabaloos I’ve been through, real estate does really well.”

But the Coronavirus crisis is likely to have longer-playing consequences for the business of property. The virus “is going to encourage us to redefine how we work,” he says, with greater emphasis placed on virtual rather than in-person communications. “Like every other organisation, we’re carrying out some incredibly successful meetings, getting lots of people together over technology – without everyone jumping on aeroplanes. It’s definitely going to redefine things – which is good.”

The future of Knight Frank

Even before the latest crisis necessitated change, Knight Frank had been laying groundwork for an overhaul of its entire business, with an ambitious data- and tech-driven reinvention due to come on-line this year.

“We are completely re-engineering how we work as a business”

“We’ve spent three years approaching over 30,000 clients and investing however many millions of quid, and we are completely re-engineering how we work as a business,” reveals Hay. “We’re doing our biggest ever investment in data and in technology, which you won’t have seen coming through yet – but it is huge.”

Over the last few years, some 1.3 million client records have been compiled by the 124-year-old firm into one place. The company is now ramping up its digital offering, powered by all that data. It currently has 40 people working in the data team; “we are on a mission,” declares Hay.

And of course there’s the necessary amped-up regulatory framework, with improved transparency, AML protocols and due diligence. “It’s healthy but it’s expensive for agents, and definitely slows up processes,” says Hay, who looks forward to the day when blockchain technology can make these necessaries less onerous for business. 

Beyond the new tech (built in-house rather than through acquisitions), the firm is “re-engineering” how it works from the ground up. New systems will “put the customer first and foremost and at the heart of every single thing we do.”

Analysing responses from those 30,000 clients, it’s become clear that it’s “the human element” that adds real value, says Hay. “Yes they want to self service; yes they want great information; yes they want a platform; most importantly they want great personal service with a human being. And that’s where we can add value because that plays to a core strength.”

Knight Frank has already set up special training facilities to move ahead with the new strategy, and “more  will be revealed in the next few months.”

While the latest Savills Annual Report revealed a shift of focus from deal-making towards “non-transactory business lines”, Knight Frank is committed to deals. KF is a partnership, driven by profit, explains Hay, while Savills – a Plc – is more interested in building up annuity income for shareholders. Consultancy and service lines are great for that, but tend to have lower margins than property sales. “We are growing our property management and we are growing our consultancy,” says Hay, “but the transactional business is more important to us.”

But there are “lots of plans diversify” in the offing – some of which are due to be announced imminently. “We are looking at two things,” says Hay: “How we can enhance property ownership, and how we can touch our clients instead of once every seven years, when they move, continuously for 18 years. It’s really helping people enjoy their property.”

The partners “want it to go on forever,” says Hay “- it’s our model. Every generation debates selling it and every generation says no. People recognise now that we’re not for sale. There was a stage perhaps eight or ten years ago when offers were coming through non-stop. now there’s just the odd thing. It depends how the leadership portrays itself to the market; if you flaunt yourself you’re going to get to the offers; perhaps the leadership ten years ago was doing that, I don’t know. But now our group strategy is very clear and it seems to be very successful and enables us to recruit great people.”

“There’s something a client told me years ago,” says Hay: “The moment you stop caring is the moment to stop.” He may have stepped away from Knight Frank, but it’s clear that he still cares deeply about the business, the people and about property – and he’s definitely not stopping yet.

Deals of a Lifetime:
Andrew Hay’s three most memorable sales

“Deals are like places; you remember them because of the people. I’ve seen the most amazing properties around the world, but it’s the people and the stories that you remember.” – Andrew Hay

1. 13.5 million acres in Australia (2018)

While on tour with Knight Frank’s flagship research tome, The Wealth Report, Hay’s team was asked to pitch for a 13.5 million acre swathe of Australia – that’s roughly one-and-a-half times the size of Switzerland – valued at a cool £1bn. “It wasn’t really a real estate investment,” says Hay. “It was a strategic play for countries or sovereigns who wanted to secure food production for their nation.”

The competitive pitch put KF up against 14 top-flight investment banks. “We got the job because they [the client] recognised that we knew how to get to the ultimate wealth,” says Hay. “We were jointly instructed with Goldman Sachs, and we completely outperformed them. That was a big moment.”

Valuing the nation-sized property was “not too difficult”, says Hay, although “inspecting it was a challenge.” The nation-sized property ended up being carved up between private individual buyers, although there was interest in the whole package.

2. Stockton House (1986)

The sale of this property “transformed the family’s life”, says Hay. It was marketed with a £750,000 guide price on behalf of an aging couple with little other wealth. On a Sunday viewing, a “very scruffy” prospective buyer rocked up driving a beaten up old car. “I’m not letting him into this house,” the owner told Hay; “I’m calling the police”. After some sweet-talking, the viewing eventually went ahead – and resulted in an offer.

The “scruffy” buyer was the head of EMI Records. “This guy was so affronted,” chuckles Hay, “but he said ‘I love your house and I’m going to buy it. but I’m going to pay double the guide price just to show I’ve got the money.'” He paid ended up splashing £1.5m, just to make his point. “What was lovely was that it transformed this family’s life,” says Hay. “They went from running out of money to buying all three daughters flats.”

3. Park Place (2011)

At £140m, Park Place in Henley on Thames was the most expensive home in Britain when it sold in 2011. “This was the last deal I did,” explains Hay, “because they don’t allow me to be unleashed on to the public anymore.”

The Mike Spink-renovated 300-year-old former boarding school went to Russian banker Andrey Borodin, garnering many headlines on the way. “That was a great deal,” nods Hay.

Donate to Andrew Hay’s 1,000km charity trek, raising funds for Rainbow Trust, here.