1 - 5 December 2009 the Guild of Property Managers and Developers was on a business tour in London. Our previous trip to the world-oldest center of business and finance was in the summer of 2008. A year ago the British property market was the first to take the impact of the world crisis. Russian professionals went to London to understand survival strategies and drivers, which help the British real estate industry to cope with the slump, see post-crisis priorities and projects. 

Day One: Old Property in the Context of Tomorrow

King's Cross project was the first item of the day’s agenda. The walking tour started in the historical building of German Gymnasium, where representatives of Argent Group told about the project and showed spectacular future of the old railway site. By 2012 the former railway terminal and warehouses will be converted into the mixed-use complex. Future passengers will become customers and guests of King’s Cross tenant companies, which have reserved their presence in the newly-built and refurbished buildings. Investors believe in good yields from commercial property in around the transport hub. It will be guaranteed by huge passenger flows, also those heading to the London-Stratford Olympic facilities via King’s Cross and St. Pancras. Today St. Pancras station is the pride of London development. Russian group saw the results of large-scale material and intellectual investment into it. An architectural landmark since XIX century, now the building is not only the famous Eurostar terminal. It has retail and hospitality levels with popular bars and restaurants. Luxury hotel and apartments in the front part (Manhattan Loft project) bust the drab image of a railway hotel.

The walking tours were followed by a meeting in the office of EC Harris. Its experts gave an overview of trends on the commercial real estate market of London. It was interesting to learn about the fate of commercial real estate sectors during the difficult period and about methodologies for property benchmarking (e.g. “should cost” indicator). Experts from Transport for London, David Simmonds and Steer Davies Gleave told about methods for calculating property value depending on its accessibility and transport efficiency, presented interesting projects.

In the afternoon the group went to Stratford, the site of Summer Olympics 2012. This part of the program was hosted by London Thames Gateway. For London the Olympic site means much more than just sports facilities. The Olympics-related projects will revitalize East London, in particular Stratford, the residential district with a rather bad image. Viewing platform arranged on the roof of the tallest Stratford building showed the intricate geometry of the Olympic site infrastructure and conceptual skeletons of buildings, which will be in the world focus in 2012. The only building, which looked ready to take customers, was the huge shopping center of Westfield, an investor-company in the PPP on Olympic site development.

Day Two: Finance and Development

The day was started in the City of London, the concentration of global business and finance. The group took a brisk walk from St. Paul’s to the British Bankers' Association to meet Simon Rubinsohn, Chief Economist of the Royal Institution of Chartered Surveyors (RICS) who told about the RICS forecast for Russia and gave an overview of strategies in the volatile situation. His presentation Is the Global Recovery for Real? generated polemics – the Russian audience turned out to be more conservative than the British analyst. The second speaker of the morning David Show, head of investment company Sabrelance, turned the discussion to practical issues. Actually, David conducted a master class on attractive investment proposal.

Visit to a recently-finished business center Ropemakers (owner – British Land) belongs to the ‘must be’ components of GMD business tours. Representatives of the project developer (Mace) and management company (Jones Lang LaSalle) having a ‘key to all doors’ got the interested audience acquainted with all technical and organizational aspects of the project, which was finished and found good tenants at the time of crisis.

The perspectives of post-crisis development and its funding were discussed at the London session of Investors Club. It was hosted by Jones Lang LaSalle and held in one of the high-rise buildings of the Canary Wharf. The first input into the discussion was made by Andrew Hume (JLL) who told about schemes for funding large-scale projects at difficult times, when banks and investors tightened the purse strings. Representatives of Aberdeen Property Investors commented on the global situation and noted that the cautious position of investment funds in Russia did not mean that they did not consider projects. A sound and well-defined project proposal would always find its investor. Of high interest was information shared by the representatives of the European Bank for Reconstruction and Development. Its position strongly influences the tomorrow’s strategy and priorities of other financial institutions. Green technologies and energy efficiency will be the indispensable properties of projects seeking investors. In accordance with EBRD the Russian construction sector is the most energy-intensive, which means a high potential for energy efficiency projects. EBRD provides financial support to PPP projects, which foresee the introduction of energy saving technologies.

Day Three: Architecture and Green Development

On the premises of British Expertise Russian group met British companies, world leaders in architecture, master planning and green development. The names of companies are world-known: Foster + Partners, Halcrow, Arup, IDA Consulting Engineers, PRP Architects, Aecom, Waterman, Cole Thompson Anders and others. The level was set by the presentation of Brandon Haw (Foster + Partners). Though slides in the presentation looked like a futuristic film, its content was quite practical. It covered the latest know-how in master-planning and design, the money-saving green solutions for office buildings. The value of commercial property in relation to transport and accessibility solutions was in focus again. The example of Millennium bridge in London has proven direct economic benefits from wisely planned pedestrian and transport flows. Other presentations were not less interesting, many explained know-how and technologies of green solutions integrated into masterplanning and architectural projects from the very early stages of their evolvement. Russian participants very much appreciated the availability of presentations provided by the British Expertise – the information was very condensed, it had to be digested later.

Tour in the BRE Global Innovation Park located outside London concluded the London program. Guided by experts the group not only learned about, but see, touch and smell most advanced technologies of green construction. We visited houses built by most advanced British companies and design bureaus specializing in technologies for green and smart houses. The ‘sustainable dwellings’ were quite different in design and cost of construction. It was made clear that by common efforts green technologies will shortly become affordable for the economy class construction and different income groups Outside temperature proved that the visited houses could be built for countries with cold climate.

The intensive program of the business tour was a success thanks to the support of

• British Consulate-General in St. Petersburg (HMCG William Elliott)

• UK Trade and Investment (Taissia Zelenkova)

• British Expertise (Nigel Peters)

• Green Building Council Russia (RuGBC, Guy Eames)

• Russian Trade Delegation in the UK

• Aberdeen Property Investors (Vera Kunkite, Charles Voss),

• Royal Institution of Chartered Surveyors, RICS (Vera Rukina)

• Argent Group

• EC Harris Built Asset Consultancy (Tim Robb)

• Gateway to London (Gill Marshall)

• Transinvest (Yuri Ganfeld)

• Jones Lang LaSalle (Maria Uzhek),

• European Bank for Reconstruction and Development,

• BRE Global Innovation Park  

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