The sales guru at the heart of the Foxtons machine for over three decades made a big move to London Central Portfolio earlier this year; here, he discusses his ambitions as the new chief executive of the investment advisory, lessons learned from his estate agency days – and how the current crisis compares to downturns past…
You started out as a sales negotiator at Foxtons in 1987, and went on to spend 32 years with the firm, rising to chief sales officer; is there anything you’ll miss from your agency days?
I enjoyed every moment of my previous life as an estate agent but after three decades I am relishing a change in perspective with my move into Real Estate Investment Advisory. Of course, I miss daily contact with colleagues, some of whom had become great friends, but we still get together to exchange market intelligence and generally indulge in our shared obsession of property.
You were managing 300 people in your former role; what is the one leadership lesson you would pass on?
I have been fortunate to work for two inspirational leaders in my career. Polar opposites but with qualities in common, although expressed in very different ways. Leading people can be uncomfortable, you are always under a spotlight. It is a common misconception that life becomes easier the more senior you become. People always want to know what the Boss thinks and take their lead from you, even subconsciously. If you are upbeat, they will be, or vice versa. A great team does not always have a great leader. However, to be a good leader you need an exceptional team. So, a key ingredient of leadership is the ability to develop a strong group of like-minded individuals.
A strong team is capable of infinitely more than one person trying to do everything. To achieve this, you must absolutely love your business and love your staff. If the last three decades have shown anything, it is that the good times don’t last forever. You can’t lose faith in those around you, the minute things are difficult. They need to see, hear, feel and smell that you believe in them. Difficult times are when your team rely on you to display leadership. They need to see you have their back in all conditions, fair weather and foul, not just when the sun shines.
What are the key characteristics of a truly great salesperson?
The ability to routinely ‘listen first, whilst also engaging your brain’. Ask questions, be interested and take a note. The part of my job I most enjoy is all the weird and wonderful people I meet, no two are ever the same. Attempting to work out what your client is aiming to achieve and why, fascinates me. A great salesperson needs to be highly informed but always restrained in their delivery. No one likes to be lectured. To understand the property requirement, first attempt to understand the person.
What will your new role as chief executive at LCP involve, and where would you like to see the firm in five years’ time?
LCP has an enviable reputation built over 30 years by Naomi Heaton. Naomi is both an innovator and respected within the industry for her knowledge and sound advice. She introduced the concept of acting for the buyer rather than the seller when this was unheard of, introduced a full-service agency for investors and launched the only closed end property funds investing in PCL. Following my track record at Foxtons, perhaps unsurprisingly my aim is now for LCP to be globally recognised as the leading Real Estate Investment Advisory firm in London. My vision is to expand our offering into other opportunities that exist within the owner occupier, lifestyle and investment markets, which may extend beyond PCL residential into other property classes.
LCP’s founder, Naomi Heaton, is now chairman of the LCP Group; how will the new leadership structure work?
Continuing in the spirit of innovation, Naomi will be focusing her efforts as CEO of a new JV with Dutch-based pension fund APG, the fifth largest globally, launching a new hospitality concept. This will initially be in PCL, then rolling out internationally. The JV acquired its first asset, the Harrington Hall Hotel in South Kensington, in December 2019.and has other landmark projects in pipeline. This leaves me to focus on the growth, development and client service delivery of LCP, assisted by Managing Director Liam Monaghan who has been with the firm since 2013.
You marshalled Foxtons through the GFC ten years ago, and have seen a number of market cycles during your career; how does the coronavirus crisis compare to previous downturns?
I began working in PCL during the 80’s boom, then worked through countless downturns some brought on by global events, some by events closer to home. To name a few, Black Monday’s stock market crash in 1987, The Gulf War in 1990, Black Wednesday in 1992 the Asian Banking Crisis in 1997, the Russian Banking Crisis in 1998, the 9/11 attacks September 2001, and of course more recently the result of EU referendum and the Brexit mayhem that ensued. The latest crisis, Covid 19, is unique in form but I suspect recovery could be similar to the period post Global Financial Crisis. Then, following a rapid depression due to lack of global demand, prices rallied by a staggering 26% between March 2009 and January 2010. Turn to 2019 and a succession of tax increases and a period of prolonged political uncertainty suppressed demand again. By the end of 2019, prices in PCL were down some 25% from their peak in 2016/17. More realistic pricing and a degree of certainty following the December General Election meant buyers began to snap up available stock in the first three months of 2020. PCL was long overdue a reversal of fortune and although this brief surge has hit a roadblock due to Covid 19, current low stock levels could reignite a similar upward trend once confidence returns and pent up demand is released again.
How has Brexit affected prime London’s residential and investment markets so far, and is there likely to be another shift at the end of this year?
I believe the Brexit effect is now largely ‘baked in’. Most have their sights set beyond transition from the EU and are focused on prime London’s strong standing as a global city. Those either wanting to find a home to live in or an asset to invest in, have been waiting for what they perceive as the ‘bottom’ of the market, which many are now calling, hence the increased activity in the sales market in early 2020. I think this will come round again.
What sort of investors does LCP represent? Is it mainly international or domestic; individuals or institutional?
LCP predominantly represents international investors, both private individuals and family offices, from all four corners of the globe. We have a particularly strong representation in the Far East and Middle East.
How are LCP’s investors responding to the current climate? Are they generally seeing opportunities or hunkering down – and what has been your advice to those worried about the future?
LCP’s investors are responding in a combination of both of the above, depending on their exposure and their world view. All our investors understand that residential property is a long-term play. Whilst it has taken a lot of hits in recent years, other years have seen double digit capital appreciation. Currently, softer prices and attractive sterling exchange rates are seen by many as an opportunity. Our clients are drawn to PCL as a safe haven asset class, for many deeply entrenched reasons: rule of law, GMT time zone, prestigious schools and universities, the global business language and a diverse and liberal culture. Our advice to those worried about the future has been that these qualities are as relevant, if not more so today, as they have ever been.
LCP produces some of the most detailed analysis of the market around; how important is hard data for both clients and consumers?
In an online world there is almost endless access to information and, of course, fake news. So, our clients set increasing store by reliable data particularly when set alongside knowledgeable and experienced interpretation. Everyone thinks they are an expert on the property market but sometimes a broad horizon view is beneficial, combined with a historical perspective.
LCP effectively acts as a one-stop shop for buyers and investors in PCL, handling sourcing, design and refurbishment, lettings, and ongoing management; what proportion of acquisition activity is happening off-market at the moment, and are there any other notable trends at play?
This year we have seen more off market activity than previously as sellers appear to be reluctant to launch into full scale marketing campaigns. Many prospective sellers still perceive the current climate as a poor moment to sell although this is not necessarily correct as buyer demand builds up steam. Approximately 25% of our acquisitions this year have been off market.
You’ve been at the heart of the Prime London property market for your entire career; what do you see as the biggest threats and opportunities for the property sector here in the coming years?
The debate over traditional versus online estate agency is yesterday’s news. The genie is undeniably out of the bottle. The last few months have proved that a strong ‘tech’ offering combined with talented people is a winning formula in all market conditions. Importantly the customer is now used to this new way of interacting with real estate professionals and will grow to expect it as the norm. It is no different from any industry; the combination of both tech and people is powerful. As far as potential empty offices and commercial property generally is concerned, the jury is out for me and far too early to tell. Whilst any future transition may be painful, when I look back at London’s ability to repurpose old buildings for a multitude of new and different uses, its track record shows that these changes are often successful and part of the ever-changing dynamism of a global city.
What have been the biggest practical challenges for you and the team over the last few weeks, and how are they being overcome?
There have been inevitable challenges around viewings of our letting’s portfolio. Video viewings have been crucial and is the new normal. With our refurbishment projects, we have suffered from supply chain issues of core materials and a reduced work force on site which we have overcome by programming works accordingly with considerate planning. Overseas clients have been required to buy from video viewings which some have done, but some will not. As these are not always emotional purchases, we have been able to advise based on our usual provision of a detailed financial model which has enabled our established clients to invest sight unseen.