Roundtable: A diamond in the rough
Brighton is known as a creative and lively city, but that brings its own challenges. We invited property experts to debate some of the issues it’s facing at our first Women in Property lunch, sponsored by SHW.
Brighton is one of the UK’s most creative and lively cities. But that comes with its own challenges. Its population is increasing – more than 290,000 people live in and around Brighton and Hove which means the demands on the city’s housing, office and industrial stock are not only growing but changing too.
As a result, the city seems in a state of flux. Drive into the centre and scaffolding and huge cranes are everywhere, as though Brighton is deciding what it wants to be when it grows up. Its potential shines brightly alongside its iconic seafront, but there’s still work to do. It is indeed a diamond in the rough.
We invited some of the region’s most well-informed property experts to debate key issues facing the city in our first Women in Property lunch, sponsored by SHW, one of London and the South East’s most active independent property real estate advisers.
ROUNDTABLE PARTICIPANTS
Moderator: Nicky Godding, Editor, The Business Magazine
- Sharon Briggs, HR Director, SHW
- Carlie Edgerton, Associate, SHW
- Tina George, Partner and Head of Real Estate, DMH Stallard Solicitors
- Victoria James, Managing Director, Chartwell Properties
- Emma Ormiston, Partner, SHW
- Jane Pinnock, Brighton and Hove City Council
- Gemma Quinn, Partner, SHW
- Sam Sherrard, Managing Director of CHP Management and Head of Commercial at The William Pears Group
- Kate Titchmarsh, Flashbulb Property PR and Marketing
- Tarniah Thompson, Head of Facilities Management & Sustainability, SHW
- Tracey Welch, Co-owner, Cuthbert Property
Emma Ormiston is a Partner at SHW specialising in the sale, letting and acquisition of offices and mixed-use properties across the area.
She’s seen a number of derelict sites redeveloped in recent years delivering some much-needed mixed-use schemes while other sites in Brighton have sat undeveloped for decades. She cites the King Alfred Leisure Centre as a good example.
“It’s right on the seafront, a real community asset, but its redevelopment has been talked about all my life. Along the coast, Worthing has redeveloped its leisure centre where perhaps the cost was offset by the new block of flats next to it. Why can’t we do that in Brighton?”
Emma also highlighted the approach to the city centre from the train station. “It’s not as smart as it could be and that’s a shame. Brighton has so much going for it as a city, a lot could be done to improve the arrival experience for new visitors.”
But, as she points out, development is often going to be piecemeal because the buildings are all in different ownership.
While the city is currently deploying a £9.6 million government levelling-up grant to improve sport and leisure facilities on Hove seafront, a highly-regarded local amenity, more needs to be done.
Brighton, like any seaside town, will always be a difficult place to develop. With the sea on one side, and in Brighton’s case the South Downs on the other, the potential for development is tight.
“People need housing, but we also need to ensure commercial space is available in the city,” said Emma. “In recent years, following the government granting permitted development rights (where property owners can convert or extend to a certain size without seeking planning permission), there has been some conversion of older office stock into residential as new, more sustainable offices are being built.”
This made sense to landlords when residential values were much higher than offices, but it has taken away secondary office space, leading to a lack of office accommodation in the city.
While sustainable new office space is being built, such as The Portland Building, where does that leave all the smaller businesses and start-ups which traditionally have taken less expensive space? The demand for serviced/co-working space has increased, especially post-Covid, but there is still demand from occupiers wanting their own front door.
Local authority planners have a job on their hands to manage changing demand and demographics, balancing the need to protect industrial and office land which offers local employment with freeing up appropriate buildings for much-needed residential conversion.
Changing residential demand is generational
Whether a developer is converting old office space, upgrading houses or building new residential units, what is clear is that building high-rise blocks is no longer the answer, according to Tracey Welch, co-owner of Lewes-based Cuthbert Property.
“More people now want to live in a community, where there are shared spaces such as courtyards or little allotments. We are seeing more demand for what I call flat builds.”
Sam Sherrard, Managing Director of property management company CHP Management and Head of Commercial at The William Pears Group, one of Britain’s largest property companies, flagged up a relatively new asset class outside London: co-living.
Co-living offers individuals the opportunity to rent a room or small apartment within a communal property, benefitting from shared amenities and activities.
According to reports, investment in the development of co-living spaces has reached nearly £1 billion since 2020, and this figure is set to rise significantly.
In Brighton, the first co-living development to have secured planning permission is being built. The cutely-named Kosy Village at Enterprise Point will have 269 self-contained studios set within generous outdoor and indoor amenity spaces.
Sam said: “The studios are smaller because there are more shared communal areas, which includes cafes or working areas for those who have hybrid or work-from-home jobs.”
Another similar development in the city is Edward Street Quarter, according to Victoria James, Managing Director at Ascot-based Chartwell Properties. “This is a new mixed-use project in Brighton being developed by Socius and Patron Capital.
“While not strictly co-living, the thinking behind it is similar as it provides a lot of communal facilities.”
There are other similar projects such as a major build-to-rent scheme by Brighton station (and another one at Hove station), being driven by Legal & General.
Tina George, Partner and Head of Real Estate at South East law firm DMH Stallard, explained that demand for this newish asset class is principally coming from the younger generation.
“Young professionals increasingly demand flexibility. They don’t want to be tied to mortgages, or more likely can’t afford them. Some clients who have invested in residential portfolios as an income stream are now diversifying into build to rent, and there are very few voids in their schemes.”
Will new residential asset classes bring society problems down the line?
Looking at it from a societal point of view, roundtable participants agreed there could be issues in the future.
Emma said: “Renting has been the norm in Europe for generations, where many haven’t seen the need to buy. Instead, they pay less to rent and put the rest into savings. The issue in the UK is that rents are so high that young people are not going to be able to save that much.
“What happens when they get to retirement age? They don’t have their own house as an asset and may have few savings to speak of.”
Carlie Edgerton, Associate at SHW, added: “A co-living space offers reduced bills, and the opportunity to have something of their own. It’s a difficult trade-off for young people which hasn’t yet been resolved.”
Gemma Quinn, London-based Partner at SHW, reports on a different solution. “In London, the HMO (house of multiple occupation) has always been a stopgap for the younger generation.
“But I’m seeing residential investors buying three-bed terrace properties, carving them up and upgrading them to a high standard. People who are earning £25,000 to £35,000 a year are happy to stay there. They have their own space, and while it’s small, it’s higher quality and they can still afford to save money for the future.
“I value these all the time for the banks and our clients, and the standard of such properties has risen significantly.”
But despite these creative ways to provide accommodation while making an income, there remains a lack of adequate housing for different demographics at the right price point.
And even if a young person does have enough money to buy a doer-upper in a bid to get on the housing ladder earlier, said Carlie, there’s no longer such a difference between buying a three-bedroom property in need of full renovation and one that’s already been done up.
Landlords face rising costs and lower values
A problem for landlords of both office and residential property is that to bring a building up to the standard at which it can be let is getting more expensive, said Tarniah Thompson, Head of Facilities Management and Sustainability at SHW.
“When a landlord tries to let a lower grade office building, they won’t attract top quality companies. Large established corporate businesses must consider their carbon reporting when looking for office space. SMEs come with higher financial risks to the landlord, and start-up businesses want flexibility. If a start-up is being lent money, one of the strings attached to the investment or loan may be an ESG (environmental, societal and governance) commitment that stops them from moving into substandard office space, even if they want to.”
Even reducing rents may not be enough to attract tenants, said Emma. “Many landlords we work with do maintain their properties, but to those who haven’t and those that have not kept up with sustainability in their buildings, we have to break the news that even if they do invest in the building and bring it up to standard, they won’t necessarily be able to command a higher rent.”
Investing in a property with due consideration as to its future occupants can pay dividends, according to Tracey.
“We bought an old council building in Worthing. It was very run down, and we did indeed secure it with a brown discount.
“But we invested, keeping the whole external structure while completely refurbishing it with eco-credentials inside, working in partnership with our now tenant who leases the property from us.”
“It is possible to take these old buildings, do them up sensitively and make a return.”
How to bring new perspectives to city development
For a city to rethink the way it develops and progresses, new perspectives are needed, and the roundtable discussion turned to widening the talent pool. Should an industry which has traditionally attracted a certain sort of professional do more to open up to those who may not consider real estate, planning or the law as possible careers? Sharon Briggs, HR Director at SHW, thinks so.
“A few years ago we set up a respect, diversity and inclusion committee. It’s still in the early stages, but we want to get into schools to talk to students about what a career in property and surveying really means.”
SHW has also embraced work experience. Every year its offers around 20 students the opportunity.
“The firm is used to taking graduates. But when I joined, I pointed out that it was paying but not utilising the apprenticeship levy,” explained Sharon.“So we started bringing in apprentices.”
At times this had its difficulties because an 18-year-old’s experience of life is different to a graduate at 21 or 22, but the firm adjusted to the different levels of experience and expectations. Sharon added: “Our apprentices are renumerated well and as a firm we flourish in diversity. We can offer school-leavers a fantastic career without them having to incur the costs of university. By doing so, we can really change who joins the industry, whether that be in a surveying, accounting or an IT role.”
SHW isn’t alone in its approach to broadening its recruitment. The wider professional sector is opening up opportunities.
Tina said: “I’ve been at DMH for more than 30 years and it has changed a lot in terms of diversity, especially over the last decade. We encourage applications from people from all different backgrounds and the profession itself is changing. The introduction of the SQE route to qualify is opening up law to a wider demographic.
“Students can train on the job rather than having to get a degree first. This opens up the career to more people from different backgrounds who wouldn’t necessarily be able to afford, or choose to go to university.
“We have 360 partners and staff. And of our 85 partners, 43 per cent are women – higher than average.
The power of role models shouldn’t be underestimated
“I sit on the management team and three of the nine-strong team are women.”
In fact, Tina points out that there are more females entering the legal profession than males.
And the power of role models shouldn’t be underestimated. As a black female Tarniah began her career in property thanks to an older woman she met while undertaking work experience. The woman took the trouble to talk to Tarniah about what she had achieved.
“I was raised in Brixton, South London and didn’t get much exposure to the property world to be able to explore a career in the sector,” she said.
“You can’t be what you can’t see and having opportunities such as work experience is a fantastic step to be able to encourage social mobility.
“People from different backgrounds want different things, so if they’re in a company where they have influence, and their views are respected and listened to, they’re going to suggest doing things differently. That’s a really healthy thing for not only the property world, but for wider society.”
