How real estate can be a hero of our time

Forget superhuman strength or leaping tall buildings in a single bound. If Paul Williams could be gifted the kind of ability that would see him sitting comfortably alongside Superman or Spiderman, the chief executive of Derwent London would go for something a little more down-to-earth. “I was asked the other day, what superpower would I like to have?” Williams says. “The ability to listen would be a really good one. To listen to our communities and to people around.” Marvel Studios might not come knocking on Derwent’s door any time soon, but for Williams the ability to connect more effectively with the communities in which the investor works is a key plot point – now more than ever as the coronavirus crisis continues. Get it right, he says, and it leads to “better developments, better areas, more employment and everyone will be wealthier”. But it isn’t easy. Williams joined SEGRO chief executive David Sleath and Savannah de Savary, founder of Built-ID, which offers a digital community consultation tool to developers, on the opening session of EG’s Sustainability Live event on 22 April. They discussed the role and responsibility of real estate firms to support local communities through the built environment – and agreed that, although community engagement might sometimes be seen as “a PR puff piece” in de Savary’s words, making a real impact calls for dedication and balance between various business needs. And for those who might suggest that prioritising the social impact at a time of crisis is soft or secondary, Williams has a message. “I don’t think it’s soft, I think it’s core,” he says. “If you don’t do this, you’re getting everything wrong… Being engaged and connecting, it’s just such an important part [of our work]. It helps you long-term. Our shareholders are very supportive of it. It’s fundamental and I think it will grow.” ESG and DNA Numerous listed real estate companies are backing up talk with action, through initiatives such as Derwent’s community funds and a £10m charitable fund launched by SEGRO to mark a century of doing business. “Community engagement has been part of our DNA since the company started,” Sleath says. He and fellow directors have waived 25% of their salaries and fees for the next three months: money which will be put into the fund and in turn used to support community projects for young and disadvantaged people. “Many of the areas we’re investing in are deprived parts of the country – social and economic deprivation is a major issue,” Sleath adds. “We go in and we regenerate brownfield areas, often neglected industrial parts of cities, and we see it first-hand. Our people want to be involved in making a positive impact on those communities.” Plenty of developers and asset owners will share that sentiment, particularly as the effects of the Covid-19 crisis on communities and economies become painfully clear. For de Savary, the goal should be to look for the good and then work out how industry can help. “The way that people have come together, the amount of volunteering that has happened in communities to mobilise and activate on a grass-roots level, has never been seen before,” she says. “There’s a real opportunity for the property industry to tap into this new grassroots sentiment, to connect with these communities that want to interact and which ultimately are going to have to interact in spaces in a different way to how they have before.” Of course, the best way to know how such spaces will be used is to ask the people who will use them – ask the right questions before a spade is put into the ground and then, as Williams emphasises, listen to the answers and act on them. Even if it sounds simple, EG’s guests nonetheless admitted that such an approach is too often shunned. “One of the problems of our system is that we design for planning applications and then everything that comes afterwards, comes afterwards, in terms of our design thinking,” de Savary says. “The biggest thing that developers and councils can do to try and help these communities that need to get back on their feet is to create adaptable spaces and from the very beginning, long before you’ve got planning and now you’re thinking about what events you want to do in that space, actually ask the community.” The pencil of our age There is no good time for a crisis, but good things can still come from them. Despite the horrors of the coronavirus pandemic, SEGRO’s Sleath suggests that a silver lining is that this period “has given us an opportunity to stand back and reset”, as a business and as an industry. Changes were already afoot, and sustainability was already an unavoidable aspect of corporate conversations that would once have been centred solely on balance sheet items and yields. Sleath struggles to think of a single investor meeting from the past year in which he hasn’t been asked about ESG. But that trend will now accelerate. The world is ready, Sleath says, and wants corporates to lead. “For a long time, profit was the only real purpose of a listed business, more or less,” he adds. “Now it’s a much broader debate around what are we here for? Who are we serving? Yes, we’ve got our customers. Yes, we’ve got responsibilities to our own staff and employees. Yes, we’ve got a responsibility, of course, to shareholders. But we’ve also got a responsibility to our communities.” Meeting those responsibilities will call for fresh thinking. De Savary wants real estate to realise its capacity for innovation – to shake up set ways of doing business in the way that an Apple or Google does. Technology will help, she says, although it is the conduit rather than an end in and of itself – “the pencil of this age”, she suggests. Rather, the heart of change will come from humans, talking, listening and learning. “Your community,” she says, “is your customer.” The panel Savannah de Savary, chief executive, Built-ID David Sleath, chief executive, SEGRO Paul Williams, chief executive, Derwent London To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette Photo: Shutterstock