The government property power players

[caption id="attachment_871141" align="aligncenter" width="570"] L-R: Liz Peace, Ian Playford, Sherin Aminossehe, Angela Harrowing, Ann Carter-Gray[/caption] The GPU is establishing an agency that will charge government departments market rents for their properties, and surplus land and property gems are being prepared for sale. Louisa Clarence-Smith meets the key players It is testament to the labyrinthine vastness of the government estate that the five strategy heads of the Government Property Unit have never before seen the stairwell chosen for the photo shoot to accompany this interview. Down below, civil servants are filing into 100 Parliament Street, SW2, the grand historic home of HM Revenue & Customs and the Department for Culture, Media & Sport. Just days away from Christmas, there is no indication of anyone slowing down for the festivities. A sign in the lobby says the security threat level is “heightened”. The morning’s headlines include news of the prime minister Theresa May shrugging off warnings about the civil service’s capacity to deal with Brexit on top of existing commitments. It has been a tough year for the mandarins. But the government remains fixed on making the civil service leaner and more efficient. An alternative to people and policy cuts is to streamline and commercialise the government estate. This summer, 1,000 HMRC staff will leave their spiritual home and move to Canary Wharf Group’s 10 South Colonnade, E14, dubbed “the Whitehall of the East”. The Cabinet Office, which set up the GPU in 2010, says the move will save around £20m a year in running costs. The relocation is one small part of a major commercialisation programme overseen by the GPU. The body is in the process of establishing a new agency that will charge departments market rents for their properties. Surplus land and property gems, such as Blythe House, W14, are being prepared for sale. And a new team, the Government Property Agency, has been assembled to run the process. If it is not exactly selling off all the crown jewels, the government is at least sharing some of the treasure. Here, we introduce the government property power players holding the keys to the chest. Sherin Aminossehe, head of the GPU An Iranian-born architect, Aminossehe was previously a vice president at HOK, leading large masterplanning, rationalisation and regeneration projects across the world from Jeddah to St Petersburg to Bolton. In 2011, she joined the GPU as head of government estate strategy and delivery, coming up with ideas of how to improve working conditions for civil servants while saving money through efficiencies across the public sector. Now she is at the helm of the UK’s largest land and property estate, having succeeded Bruce Mann in October. The brief The GPU has been set tough targets by the Cabinet Office – to sell £5bn of property during this parliament and cut its offices portfolio by 75%. The latest government data puts the size of the central estate at 89.5m sq ft across 4,900 sites. “We have a really big Lego set,” Aminossehe says. “The biggest there is.” She is responsible for working out how the estate can save money, unlock capital from property disposals, and release land for housing. Sitting under the GPU banner, the hubs programme, government property agency and One Public Estate are all designed to help achieve this. What’s next? With the Government Property Agency taking much of the responsibility for the offices estate, the GPU can shift its focus to the wider property portfolio. This year’s checklist includes creating the first national digital asset register. “Good data information is at the heart of everything that we want to create,” Aminossehe says. “If you don’t have the necessary information, then you can’t say, ‘ok, how do I know that this strategy works or not?’.” Recruitment is also central to the GPU’s plans. Aminossehe wants to establish a fast-stream civil service programme for property in 2018. “I look at all the companies we work with, and consultants, and they all have their own graduate scheme but we don’t have a property graduate scheme yet, so sometimes we’re losing the bright young things to the wider industry out there, and there’s actually a lot of exciting roles in government.” Will the GPU eventually be superseded by the GPA? Aminossehe says not. “This isn’t about a wholesale takeover of the government estate. It’s doing what is commercially right and operationally right for the civil service. Departments want to concentrate on the policy implementation, driving better health outcomes for example in the Department for Health, getting our troops up and running in the Ministry of Defence. Sometimes property can be a bit of a distraction, and we’re here to help them. And there will always be a role for a joint GPU-central body working together to make sure that’s achieved.” Favourite part of the government estate? “Blythe House, W14. It was the scene for the latest version of Tinker Tailor Soldier Spy, and one of the goods lifts is actually called the ‘Cumberbatch lift’ because he [Benedict] went up and down in there so much,” she says. The building, which currently holds the Victoria & Albert museum archives, is being prepared for sale. Liz Peace, GPA shadow chair A familiar face to both policymakers and the property industry, Liz Peace, former chief executive of the British Property Federation, has been tasked with creating a new central body that will manage the central government estate: the Government Property Agency. She is no stranger to operating at the interface of the public and private sector. During her 27 years at the Ministry of Defence, she helped set up and then move towards privatisation of the defence research establishments, which became QinetiQ. After 13 years at the BPF, Peace thought it was time to retire in 2014. “Somehow retirement didn’t quite work,” she says. “In fact it was Sherin who said, would I be interested in chairing this new body that we were going to set up to hold assets. And I thought, actually, this was a really brilliant coming-together of both the things I’ve done in my career.” The brief The government wanted to create a company to manage its assets, and Peace was named in George Osborne’s 2015 comprehensive spending review as the woman appointed to work out how to do it. Peace has already made four senior appointments to the executive team on an interim basis, with the expectation that they will continue to run the agency once it is implemented. Central to the plan is to improve civil servants’ working conditions through the take-up of more efficient, modern offices. It is an issue close to her heart. “I have worked in some amazingly awful places in my career,” she says. “I mean, really, really awful. Lino on the floor, leaky roofs. I don’t think civil servants should have to work in that situation, and I don’t think that they should have sub-standard offices.” What’s next? Peace is cautious about setting a strict timetable. “I think it’s probably fair to say it is more complicated than perhaps it was first envisaged when senior people first thought this was the time to do it,” she says. “We will be starting a period of shadow trading, so testing how we are going to do it. Sometime over the next nine months or so, we will actually create the new central body. That is something to be agreed with ministers.” As the agency takes control of departmental assets, they will also acquire civil servants currently responsible for property management in those departments. She will also face the challenge of winning over the permanent secretaries – the most senior civil servants in each department responsible for the day-to-day running and management. “All permanent secretaries should be – they’re not – but they should be, obsessed with having the most cost-effective department. Part of that is actually having the most effective accommodation for their people.” Most unusual building you found at the MOD? “Solent Forts [four man-made island forts designed to protect the Solent and Portsmouth, which are now hotels and a museum]. “We used to use them for practices between the SAS and the SBS, for terrorist simulations. One side would be the terrorists, one side would be the defenders or the rescuers, which would result in several broken arms and whatnot.” Ian Playford, interim chief executive of the GPA A rare specimen in property – a man outnumbered by women – Playford insists he is not a fish out of water. The former executive at Parkridge Holdings, Aviva, JLL and, most recently, group property director at Kingfisher, joined the GPU in July as interim chief executive of the GPA – although his appointment was only revealed in November. Over a 33-year career in property, he has had plenty of experience of setting up new ventures. At Aviva, he created new funds; at King Sturge, he established the City advisory arm and at Parkridge Holdings he set up new overseas businesses in Russia and western Europe. Most recently, as group property director at Kingfisher, he set up their property function, consolidating areas of 12 siloed businesses. He is also no stranger to government. Since 2014, he has been non-executive director on the board of HM Courts & Tribunals Service, supporting the executive team to deliver a five-year £700m investment to redesign the business. The brief As chief executive, Playford is tasked with setting up a successful and sustainable long-term asset management business comprising around 3,500 assets valued at circa £3.5bn. Departments will be charged market rents for the publicly owned freehold space they occupy. The agency will predominantly own offices and warehouses. Specialist property assets such as laboratories, where there is little opportunity for commercial management, will not be moved into the agency. It also will not be responsible for land held by the Ministry of Defence, which has its own Defence Infrastructure Organisation, or the Department of Health, which has its own propco, NHS Property Services. The agency will “come up with portfolio solutions that departments can’t do on their own because they’re working in smaller boundaries of thinking”, Playford says. “From that, we’ll enable the government to accelerate some of its ambitions in terms of reducing cost and releasing capital that’s in the real estate.” What’s next? The next 12 months will be about sorting out how to charge departments rents so that they “feel the burden of cost for the property they occupy, so that it becomes a known value to them”. Does he see the agency gradually gaining control of more government assets? “If we’re successful in what we do and we achieve what we want to achieve, then there may be benefits and merits in having other conversations,” he says. “But in the short term or medium term, there’s plenty to do.” Favourite court? “The Royal Courts of Justice, WC2. It’s a fantastic building. It doesn’t work very well. The gross to net in there is appalling. It’s 20% or something.” [The GPU is not proposing to sell it.] Ann Carter-Gray, director of the hubs programme Carter-Gray spent 13 years working for Boots in a variety of property and strategic asset management roles before joining the civil service in 2000. Appointed regional director for the small business services at the Department of Trade and Industry, she worked in various enterprise policy roles before joining the GPU in 2011. She lives in Nottinghamshire with her farmer husband. The brief A trained chartered surveyor, Carter-Gray is overseeing the monumental challenge of reducing the government office estate from 800 buildings to fewer than 200 by 2023. There are two key elements to this. One is about reducing the number of civil servants in central London and taking them to the periphery, in places like Croydon and Canary Wharf. Then in the regions, it’s about bringing people back into the centres in major metropolitan areas. “There will be more collaboration within a building, rather than departments sitting separately,” she says. “You won’t see walls between them, they can actually share space, they can meet around the water cooler.” What’s next? The consolidation programme has unleashed a host of mammoth office requirements across the country. In some cities, they will represent the largest take-up seen in this cycle. The requirements are being driven by HMRC, which ends its long-standing property contract with Mapeley Estates in 2021. So far, 25-year leases have been signed with Stanhope and Schroders’ Ruskin Square in Croydon, Salmon Harvester Properties’ 3 Glass Wharf in Bristol, and Canary Wharf Group’s 10 South Colonnade, E14. Landlords are now fighting it out for a further 12 regional centres and two London hubs. “It’s a bit like gold dust,” says Richard Archer, Canary Wharf Group’s head of lettings. “You get the government covenant, on an RPI lease. I can’t think there are many 15-year RPI triple-A covenant buildings around.” Favourite building outside London? “Temple Quay House and 2 Rivergate in Bristol, because they actually gave me the idea for developing the hubs programme, bringing departments together and actually transforming our office estate.” Angela Harrowing, programme director, asset efficiency and One Public Estate A career civil servant, Harrowing spent nine years working at the Department for Communities and Local Government in various roles including housing, local growth, neighbourhood planning and local government policy. While on the civil service fast-stream, she went on secondment for six months to KPMG, providing services back to central government. Her next fast-stream position was at the GPU, where she has been since 2013. The brief Harrowing is responsible for ensuring the government releases at least £5bn of land and property in 2015-20. That involves working with departments on their strategic asset management plans, and with the DCLG on releasing land for housing. The One Public Estate programme enables land and property release by bringing public sector bodies together, pooling data on their asset holdings and developing joint strategies. Councils join on a voluntary basis, receiving financial incentives. Cornwall is a good example, Harrowing says, where the fire, ambulance and police services have been brought together, saving £500,000 and improving response times for the 6,500 people in that area. What’s next? So far, 188 local authorities have signed up to the initiative, with a further 50 expected to be announced early this year. Does she think the programme should be mandatory? “No,” Harrowing says. “Because you deliver more and better outcomes by wanting to do it.” Will it be a challenge to get different departments to work together? “It can be, but I think the prize is worth it. Different partnerships have different levels of maturity and part of our programme is about helping those to get on and deliver together.” For the property industry, she thinks “broadly” it is easier for professionals to identify opportunity areas when an area is signed up to the programme. “Part of joining the programme is looking at all of the assets that different partnerships own, and recording those and mapping those, and that generates ideas for the new joint venture projects.” Most unusual government building you’ve come across at the One Public Estate? “I went into Bedford Magistrates Court and I expected to see a bland building, but it is amazingly ornate with beautiful ceilings.” • To send feedback, e-mail louisa.clarence-smith@estatesgazette.com or tweet @LouisaClarence or @estatesgazette