Last year saw major-league agency CBRE bring together four Savills alumni – including one of PCL’s best-known agents, Charles Lloyd, and acquisition specialist Marcus Bradbury-Ross – to offer ‘bespoke and confidential advice to private clients on residential property across the globe’; speaking to PrimeResi, they discuss the challenges of starting a new venture in the middle of a global pandemic, avoiding conflicts of interest, and the key trends at play in the super-prime market…
The Private Office is a new offer within CBRE residential; how does it work?
There are three key roles.
- Acquire residential and commercial (by cross referring) property, in all its guises, for private clients – already within CBRE and externally. We were established to retain CBRE clients who use the commercial disciplines but overlook the residential capacities in their super-prime searches over £10m. We will, very occasionally, act for a seller although we are very selective about this.
- Be the glue to CBRE – UK and globally – to collaborate with teams and make it work smoothly. Our clients are already global, be they UK based or overseas, they all have assets in multiple countries – this is matched by us with over 100,000 employees (excluding affiliates) operating throughout 160 countries.
- Establish a global network of Private Wealth advisors within CBRE – a little green book if you will.
Marcus, you joined CBRE in January of last year and launched the Private Office just ahead of the effective closure of the housing market during lockdown; has this affected how you approached the business?
It is important to remember this is a global pandemic and everyone has had to re-assess how they do business. I was lucky in that I had six weeks in head office to acclimatise to CBRE and meet a lot of colleagues from different parts of the business face to face. Charles faced a much harder challenge as he joined us in the middle of lockdown, just after Easter, so was working from home and meeting new colleagues over Zoom. CBRE has a fantastic ethos and everyone has been highly receptive to and supportive of The Private Office, which really helped.
Charles, you joined a few months later, having been involved in some of PCL’s biggest transactions over the last couple of decades; how has the pandemic impacted on buyer behaviour in the golden postcodes?
The first lockdown made everyone aware of the limitations of their existing homes, whether they owned or rented. Some decided they needed additional rooms for home working, others realised they needed some outside space or larger outside space, and some decided the needed a home in the country, either instead of or in addition to their current home.
In addition, quite a lot of sellers decided, post lockdown, that they wanted to move but without the stress of putting their home on the open market and chose to sell off-market. This is where our knowledge, experience and little black book of contacts comes into its own as we can access these off-market properties for our retained clients.
Travel restrictions and quarantine requirements have made it difficult for international buyers to visit London and buy property. This is particularly noticeable in the super-prime market (£10m+). There is a huge pent-up demand from UHNW international buyers, looking to capitalise on the weak Pound, the fall in prices since the last peak in 2014 and buy before the additional 2% increase in SDLT chargeable on foreign buyers from next April.
What sets The Private Office of CBRE apart from other buying agents and high-end property agencies?
Aside from our approachability, wealth of knowledge and experience, we pride ourselves in being truly impartial. Unlike other players in the market, CBRE do not sell super-prime property, therefore we are not conflicted and can act for the buyer, giving impartial, trusted advice, while sourcing best-in-class property on and off market through our network of contacts. We can also introduce them to a variety of specialists from tax advisors and lawyers to education consultants, immigration consultants and every aspect of property advice from architects to planning consultants, contractors and designers etc.
What are the most frequently-asked questions about the London market by your international clients?
“When is the best time to buy” and “Which areas will see the best growth over the next 5-10 years”.
How do you prevent conflicts of interest – for instance, are you permitted to recommend properties CBRE’s residential agency is selling?
CBRE has well established policies and procedures designed to ensure compliance with our professional obligations in relation to both confidentially and conflict. These comply with RICS Regulations and IPF guidelines and are independently audited as part of our Quality Assurance Certification.’
As mentioned earlier, CBRE do not currently sell super-prime property, therefore we are not conflicted and can act for the buyer, giving impartial, trusted advice. If the occasion should arise, we would disclose the position to both parties as we can only act for one of them.
Marcus, what’s been the biggest change for you moving from your own buying agency to the largest property advisory company in the world?
The ability to retain autonomy and control was paramount for me and that has not changed. Having worked at two of the other great property companies I was familiar with corporate life. That said, I have been very surprised with the ethos at CBRE – it really is collaborative and enables us access to an unrivalled global platform and client base.
There is little evidence of day to day hierarchy in the UK and indeed global senior leadership, which is very open and transparent.
Are there any notable deals or instructions that the team has done this year that you can talk about?
Despite the challenges this year has thrown at all of us, we have been instructed by a very healthy number of clients to assist them achieve their property goals. As the statistics bear witness, the “super-prime market” in 2020 saw a similar number of transactions to past years.
Discretion is our watch word so unable to talk about these, as you would imagine…
We have also been engaged by a number of UHNW clients to find a variety of property in diverse locations from Mayfair, Esher, Wentworth and wider Surrey.
What are your predictions for the market, short and long-term?
International travel restrictions will continue to constrain the market in the short term, but if the vaccine proves effective and restrictions ease then we could see a surge in demand from overseas buyers at all price levels for the reasons mentioned earlier. London has always been seen as a safe haven for buyers because we have long term political stability, a relatively benign tax regime, great education, a rich cultural heritage and long-term stability in the property market.
Are there any new-build developments which have generated significant interest ahead of launch? And how can developers make sure their schemes stand out in the virtual world?
The regeneration of Queensway and in particular the redevelopment of Whiteleys by Finchatton and Park Modern by Fenton Whelan have created a bit of a buzz.
A few years ago, there was a spate of reports about HNWI preferring to rent, some were a “try before you buy”, some not wanting to deal with stamp duty. Is this still a trend and are there enough high-end properties for rent to deal with demand?
Yes, this was a trend we have seen over the last few years, as buyers also waited to see the outcome of the general election, Brexit negotiations and the effect these would have on the market. Very few have actually bought what they were renting though. There have not been enough high-end properties generally to satisfy this demand, as tenants at this level have extremely high expectations regarding quality and condition.
Are there any sectors and/or locations that are receiving particular attention from you HNW clients at the moment, and any that you anticipate seeing notable growth in the coming year(s)?
Detached houses with large gardens are popular, although there are not many in PCL! You tend to have to go slightly further afield to Holland Park or St John’s Wood to find them. These property types have done well this year (if priced right). Bayswater, around Queensway, is attracting attention due to the regeneration mentioned earlier.
The country market, as we all know has seen a huge surge in activity. The Cotswolds especially, has seen huge transactions numbers throughout Covid at the higher levels of £4m plus.
The world of Multi Family Housing, which is such colossal business for our US colleagues, has been making great strides in UK and indeed across Europe. This will continue to grow in popularity over the next five years, as institutions, funds and private clients diversify their portfolio into MFH.
What’s the best piece of advice you’ve both received?
Lloyd: When I was buying my first flat 30 years ago, my late grandmother advised me to buy the smallest property in the best street rather than the biggest property in the worst street! I have stuck with that mantra and it has always served me well.
Bradbury-Ross: When I started work after university and joined a large property company – my then boss advised me to never truly fall out with anyone within the industry as you never know when they might be offering you a job. The property world is so very small. I have endeavoured to observe that, believe it or not!