Interview: John Slade – a different game

Twenty months on from taking a job with the French, a very British John Slade is certain he has delivered the revolution the French demanded. Samantha McClary reports. Portraits by Tom Campbell Game changers. It was a slogan that just called out for industry-wide mockery. And when BNP Paribas Real Estate UK revealed this as their headline strategy a little more than a year ago – mockery there was aplenty. But none of that matters to chief executive John Slade. All he cares about is whether he has achieved what he set out to do. Whether he has changed that game. So far, so good. “A year ago, if I had been asked ‘Are you going to get where you want to get to?’ I would have crossed my fingers and said yes,” he says in the group’s City HQ. “We have done more than I thought we could do in a year-and-a-half, and I believe we can do it again.” A year on from when Estates Gazette last sat down with Slade – back when he was crossing his fingers – we reconvene to find out just how much has been achieved and why some of the steps forward have even been a surprise to ?Mr Game Changer himself. Breaking through Twenty months ago, Slade had his work cut out. He had just joined a property adviser that was backed by one of France’s biggest banks. The problem was, it seemed ashamed to admit it. And the issue was UK-specific. BNP Paribas’ real estate arm was already a leading force in France and Germany, but its UK standing was a little lacklustre. Something had to change and Slade focused on developing a strategy with two key aims; to see BNP PRE become proud of its French bank backer and to strengthen the business so it became a recognised brand in the UK. At that time, Slade was presenting a business plan to staff called Breaking Through. One of the key slides showed a fist smashing through a wall. Not exactly subtle. But then neither was phase one of the plan of action. It included boosting its rankings in the UK league tables and shifting the balance of the business from 70% consultancy: 30% transactional to a more ?even figure. In those 18 or so months, BNP PRE has recruited more than 80 staff to the business – some 50 senior employees and 30 directors adding to the 550-strong UK team – and has increased its turnover by around 28% to more than £81m, with a profit of £15m – £17.5m. It has begun its move up the agency league tables, moving from 13th in the EG Top Agents 2012 to 11th last year, and Slade is quietly confident the group will have entered the top 10 – potentially reaching number eight – in this year’s rankings. Talent Hunting The fist through the wall analogy is a pretty apt depiction of BNP PRE’s approach to the past year. It has hardly been backwards in coming forward and the group has not been afraid to flash the cash to secure the talent it needs to expand the business. Slade refuses to say just how much has been spent on recruitment but admits: “It was substantial… it was not thousand of pounds.” He does say that the hunting and gathering of staff was completely funded on balance sheet, however, meaning the business has the ability to invest again in 2014 without eating into capital. “Recruitment was all paid for with a profit last year,” he says, “and we want to do that again this year.” BNP PRE executive chairman Philippe Zivkovic laid out plans to increase staff numbers in the UK division of the business by 150 in three years. A third of that has been achieved and this year, Slade has his eyes on adding a further 50 senior employees to the business. “The group is happy with what we have done,” says Slade. “They see it as the beginning of the plan. There are still one or two important roles that we would like to fill but we are ready to move into phase two. We will be more widespread this year, with a particular focus on residential, valuation and corporate real estate.” The year ahead While many may think BNP PRE is new to residential, the firm is actually one of the leading authorities on affordable housing and is one of the largest sellers of land for the London boroughs and for the NHS in the capital. Slade himself was unaware of this when he joined the firm in late 2011. What was lacking was a new homes team. A team that could seize the opportunity of being able to advise from the start to the finish of the residential journey. The firm had the land, it knew the developers, but the middle was missing. This was swiftly rectified by the appointments of Adrian Owen and Steve Cooper from Montagu Evans and Julian Sedgwick from Savills in Singapore. Three or four more senior hires are expected this year as Slade sets his sights on the residential division posting a 60% growth in turnover by 2016. The valuation department was already putting in a strong performance for the business in 2013, outperforming budget by 15% with turnover increasing by £1m to £8m. Work was primarily in the recovery and liquidation sectors. Now Slade sees a real opportunity for BNP PRE ?to get into advising on secured loans and the banking and institutional sector. The ?target is locked and loaded, with a further three or four people set to be drafted into ?the division in the next 18 months. Corporate real estate will also be a focus this year, with Slade labelling BNP PRE’s corporate clients, the likes of IBM and Centrica, the “lifeblood of the business”, which the firm has to make sure it services properly. Alongside growing those established parts of the business, Slade is keen to expand into new domains. Banking on success “BNP PRE is unique because we have the bank and because we are multifaceted,” he says. “We are advisers, a developer, a bank, and investment manager – in the top 10 in Europe – and have financial expertise. We are a unique brand that offers things our advisory competitors cannot.” To exploit its unique position the agent is working on a plan with the bank to break into the debt advisory and debt provision market. The push is being led by former managing director of US private equity firm Carlton Group David Barry, who joined BNP PRE in spring 2013, and while he refuses to share details, Slade says the firm has already originated debt on two or three of its deals – for some Russian and Thai investors. “Having the bank behind us is very powerful,” says Slade. “We are well capitalised in our own right, but the bank gives us that capital strength and I think that’s an advantage our competitors do not have.” Part of BNP PRE UK’s plan to expand the business has always been to make more use of the bank’s backing. And it seems to be paying off. “The bank’s financial institution g roup is a great stepping stone for us to get access to the sovereign wealth funds, which is very important for us when we are buying, but also in terms of getting sales instructions,” explains Slade. “It means we can go straight in to the top people.” Investment activity for the business in 2013 increased 2.75 times on 2012, driven primarily by overseas players – some 69% of investment in London in the past year was carried out by international parties, with 36% from the Far East and 26% from the Middle East. In the past year, the firm has bought an IMG Group let office block in Stockley Park ?for a private client for more than £42m, a £30m City office for a Russian client and acquired some £30m of ?hotels in both the City and Edinburgh for Apex Hotels. “We started last year at 25% transactional business. We’re now 35% to 40%,” says Slade. A major scoop in netting News UK for , the 428,000 sq ft sibling development to the iconic tower at London Bridge, SE1, also ranks pretty high on Slade’s pride list alongside an active year in the City where it leased as much as 40% more space than in 2012. “We have moved the brand on enormously in the past 15 months,” he says. “We’re not quite comparable with the number one position we have in Germany and France but I think we are now known as a dynamic brand that is coming through. “We would not have had the resource to do what we have done 15 months ago.” The flip side While BNP PRE may have been on a mega hiring spree in the past year or so (and will continue to be going forward), the business has not been without its casualties in the past 12-18 months. Directors have left and there have been redundancies with several employees in the property management business put on consultation in January. But Slade remains determined that all parts of the business will grow. “Yes, we have changed the game but we are not the finished article,” he says. “We are not big enough yet to challenge the majors in the UK but we are certainly getting there. “I see yet more investment from the group into the UK. We will endeavour to consolidate our top five place organically but I would not write it off inorganically. “The capital, the desire and the support is there to do it. I see us achieving that in the next two to three years. “We have shown we can change the game and we want to keep changing it. We want to be dynamic and progress as the market progresses and be fleet of foot. It is bloody hard work, though.” Game on.