Hot property

Everyone’s into it these days. You can’t switch on the television without a property programme showing how to make a fortune buying and selling houses, while the newspapers are full of speculation about the ups or downs of house prices and interest rates. But just as the recent fortunes of bricks and mortar have helped many people make a tidy sum, the companies that deal in commercial property have had a good time of things too.


Although less prominent in the minds of most, the buying and selling of office blocks, shopping centres, hotels, casinos, factories and warehouses is big business. The sector has been booming for 10 years now and the top 10 commercial property companies in the UK turned over about £1bn in the UK last year.


You’ll have seen many of their names on ‘for sale’ or ‘to let’ boards in the local high street, but what do these firms actually do? Like estate agents, they advise on buying, selling, letting and renting property and receive a commission for doing so. Instead of a three-bed semi, however, it could be a high street mobile phone outlet at £500 per square foot, or a warehouse the size of 20 football pitches worth £6m a year in rent.


Commercial property firms will also manage portfolios of investments and advise on property strategies, as well as provide services in property management, market research, valuation, planning issues, taxation, rent reviews and building project management. But while a strong market is advantageous to the industry, it presents its HR professionals with a set of new issues to tackle.


Mergers and acquisitions are not unusual, the market is becoming more international, partnership schemes have become a common business structure, and recruitment and retention of valuable staff is now a key challenge.


Steven James, head of HR with commercial property partnership King Sturge, which employs around 1,000 people in the UK – 200 of whom are partners – says: “We don’t actually sell anything except knowledge. The business is all about knowing the market, so we depend on employing the best people.”


With a head office based in London, King Sturge believes the partnership structure helps the company attract the best people and keep them incentivised to produce the best results.


There are two categories of partner: equity and salaried. Equity partners are by definition senior people who take a share of the firm’s profits, and stay close to the coalface. Salaried partner status is the stepping-stone to becoming an equity partner.


“The partnership culture generates a feeling of involvement and camaraderie because everyone has similar goals,” says James. “It creates a strong team spirit, which we try to maintain by ensuring there are no barriers to communication.”


At King Sturge, the partners are in charge of profit centres and report on financial and other measures of performance to management boards. While it is a partnership, the company has a corporate management structure, and HR is represented on the management board. “I see myself as a business partner,” says James. “On the board, I work out the people implications of business issues that come up.”


Making sure the reward structure is robust occupies a lot of HR’s time. Besides using salary and benefits surveys from independent sources, King Sturge gathers information from new recruits to ensure policies match staff expectations.


“It has been a fast period of growth,” says James. “It is key for us to make sure people like working here. We need to recruit the best and retain them. We aim to make people feel like they’re being looked after, that they’re in control of their destiny and know where their career paths are going.


“Our surveyors could easily set up on their own or go to other companies, so we need to give people responsibility and not over-manage them.”


Recruitment and retention are also major challenges for Pascal Boulicault, HR officer for Europe at commercial property firm, Jones Lang LaSalle. The company is making a transition to global operations and adapting its structure from a partnership scheme to listed company status.


Ranked the third largest commercial property business in the UK, with a projected turnover of £120m for 2004, the company was formed by the merger of UK partnership Jones Lang Wootton and listed US multinational LaSalle in 1999. It now boasts 17,000 employees worldwide, with around 1,800 based in the UK. Jones Lang Wootton relinquished the partnership structure upon merging, and the change to a corporate framework has characterised HR strategy ever since.


Boulicault says that during the partnership era, HR mostly provided support for transactional activities, ensuring that, for example, administration and remuneration ran smoothly, while partners went about their business. The move to a listed company has seen the HR function adopt a more strategic role.


“In a much larger company, HR has to operate at a different level, and is expected to be closer to the business,” he says. “For example, it has a greater strategic role to play in anticipating skills needs and trends, and also has to ensure management thinks across lines of business so that every opportunity in the relationship with the client is exploited.


“It’s a relatively young management team operating at senior level. Many of them came through during the partnership days and now realise they have to acquire new skills. They are open to advice and place a high degree of trust and value on HR expertise.”


Boulicault says a lot of effort has been put into improving the level of management skills, using talent management programmes and coaching leadership skills. “Partnerships tend to be centred on the partner and have a family-like atmosphere,” he adds. “Now we are a more complex, global business.”


Recruitment and retention are key planks of Jones La LaSalle’s HR strategy. The company recruits 50 graduates a year in the UK, and where most used to come from property-related degree courses, the net is now spread much more widely to other business subjects.


The same principle is applied to recruitment at more senior levels. In the past, the vast majority of employees were drawn from the property services sector, but now it is recognised there is transferable expertise in investment-orientated businesses, such as banking and financial services.


The company now has a presence in 17 countries, so people with international experience are needed. While in some ways, this is another recruitment headache, it also helps to retain ambitious individuals who relish the chance to progress through an international company and work abroad.


Boulicault also plans to create greater visibility in the company’s bonus system. “Generally, bonuses are discretionary, and it’s not always clear what the bonus expectations are,” he says. “We are aiming for more transparency and linking bonuses to the performance of the individual and the business.”


Boulicault admits he’s still got lots to learn about a complex business that is going through significant changes, but feels it provides an opportunity to build on his bank of experience.


“I’m kept very busy,” he says. “It’s a fast-running business in a positive market. People work hard and have high expectation of their management, so you really feel part of something.


“We’re intrinsically linked to the global economic situation and our markets are sensitive to the slightest changes, so it’s vital we can anticipate market trends.”


Everyone’s into it these days. You can’t switch on the television without a property programme showing how to make a fortune buying and selling houses, while the newspapers are full of speculation about the ups or downs of house prices and interest rates. But just as the recent fortunes of bricks and mortar have helped many people make a tidy sum, the companies that deal in commercial property have had a good time of things too.


Although less prominent in the minds of most, the buying and selling of office blocks, shopping centres, hotels, casinos, factories and warehouses is big business. The sector has been booming for 10 years now and the top 10 commercial property companies in the UK turned over about £1bn in the UK last year.


You’ll have seen many of their names on ‘for sale’ or ‘to let’ boards in the local high street, but what do these firms actually do? Like estate agents, they advise on buying, selling, letting and renting property and receive a commission for doing so. Instead of a three-bed semi, however, it could be a high street mobile phone outlet at £500 per square foot, or a warehouse the size of 20 football pitches worth £6m a year in rent.


Commercial property firms will also manage portfolios of investments and advise on property strategies, as well as provide services in property management, market research, valuation, planning issues, taxation, rent reviews and building project management. But while a strong market is advantageous to the industry, it presents its HR professionals with a set of new issues to tackle.


Mergers and acquisitions are not unusual, the market is becoming more international, partnership schemes have become a common business structure, and recruitment and retention of valuable staff is now a key challenge.


Steven James, head of HR with commercial property partnership King Sturge, which employs around 1,000 people in the UK – 200 of whom are partners – says: “We don’t actually sell anything except knowledge. The business is all about knowing the market, so we depend on employing the best people.”


With a head office based in London, King Sturge believes the partnership structure helps the company attract the best people and keep them incentivised to produce the best results.


There are two categories of partner: equity and salaried. Equity partners are by definition senior people who take a share of the firm’s profits, and stay close to the coalface. Salaried partner status is the stepping-stone to becoming an equity partner.


“The partnership culture generates a feeling of involvement and camaraderie because everyone has similar goals,” says James. “It creates a strong team spirit, which we try to maintain by ensuring there are no barriers to communication.”


At King Sturge, the partners are in charge of profit centres and report on financial and other measures of performance to management boards. While it is a partnership, the company has a corporate management structure, and HR is represented on the management board. “I see myself as a business partner,” says James. “On the board, I work out the people implications of business issues that come up.”


Making sure the reward structure is robust occupies a lot of HR’s time. Besides using salary and benefits surveys from independent sources, King Sturge gathers information from new recruits to ensure policies match staff expectations.


“It has been a fast period of growth,” says James. “It is key for us to make sure people like working here. We need to recruit the best and retain them. We aim to make people feel like they’re being looked after, that they’re in control of their destiny and know where their career paths are going.


“Our surveyors could easily set up on their own or go to other companies, so we need to give people responsibility and not over-manage them.”


Recruitment and retention are also major challenges for Pascal Boulicault, HR officer for Europe at commercial property firm, Jones Lang LaSalle. The company is making a transition to global operations and adapting its structure from a partnership scheme to listed company status.


Ranked the third largest commercial property business in the UK, with a projected turnover of £120m for 2004, the company was formed by the merger of UK partnership Jones Lang Wootton and listed US multinational LaSalle in 1999. It now boasts 17,000 employees worldwide, with around 1,800 based in the UK. Jones Lang Wootton relinquished the partnership structure upon merging, and the change to a corporate framework has characterised HR strategy ever since.


Boulicault says that during the partnership era, HR mostly provided support for transactional activities, ensuring that, for example, administration and remuneration ran smoothly, while partners went about their business. The move to a listed company has seen the HR function adopt a more strategic role.


“In a much larger company, HR has to operate at a different level, and is expected to be closer to the business,” he says. “For example, it has a greater strategic role to play in anticipating skills needs and trends, and also has to ensure management thinks across lines of business so that every opportunity in the relationship with the client is exploited.


“It’s a relatively young management team operating at senior level. Many of them came through during the partnership days and now realise they have to acquire new skills. They are open to advice and place a high degree of trust and value on HR expertise.”


Boulicault says a lot of effort has been put into improving the level of management skills, using talent management programmes and coaching leadership skills. “Partnerships tend to be centred on the partner and have a family-like atmosphere,” he adds. “Now we are a more complex, global business.”


Recruitment and retention are key planks of Jones La LaSalle’s HR strategy. The company recruits 50 graduates a year in the UK, and where most used to come from property-related degree courses, the net is now spread much more widely to other business subjects.


The same principle is applied to recruitment at more senior levels. In the past, the vast majority of employees were drawn from the property services sector, but now it is recognised there is transferable expertise in investment-orientated businesses, such as banking and financial services.


The company now has a presence in 17 countries, so people with international experience are needed. While in some ways, this is another recruitment headache, it also helps to retain ambitious individuals who relish the chance to progress through an international company and work abroad.


Boulicault also plans to create greater visibility in the company’s bonus system. “Generally, bonuses are discretionary, and it’s not always clear what the bonus expectations are,” he says. “We are aiming for more transparency and linking bonuses to the performance of the individual and the business.”


Boulicault admits he’s still got lots to learn about a complex business that is going through significant changes, but feels it provides an opportunity to build on his bank of experience.


“I’m kept very busy,” he says. “It’s a fast-running business in a positive market. People work hard and have high expectation of their management, so you really feel part of something.


“We’re intrinsically linked to the global economic situation and our markets are sensitive to the slightest changes, so it’s vital we can anticipate market trends.”


Key challenges in the property sector


– Recruitment and retention


– Anticipating HR implications of business issues


–  Managing HR implications of partnership structure or transition from partnership


CVs


Pascal Boulicault


Employment


– 1982-1991 From personnel officer to divisional HR manager (via finance), Hewlett Packard France


– 1991-1999 HR director for continental Europe and Ireland, Sedgwick Group and Marsh McLennan (following merger)


– 1999-2004 Regional HR director positions (Continental Europe, Asia Pacific Middle East), LogicaCMG


– May 2004-present HR officer for Europe, Jones Lang LaSalle Europe.


Education


– Masters degree in finance and economics from the Political Science Institute, Paris


– Bachelor degree in law (France)


Steven James


Employment


– 1980-1983 International recruitment adviser, Aramco Overseas Company, the Hague (oil services company to the Arabian American Oil Company, Saudi Arabia)


– 1983-1985 Senior employee relations adviser, Fluor International


– 1985-1988 HR manager, Ewbank Preece Consulting Group (international consulting engineers)


– 1988-present HR partner, King Sturge (international property advisers) Ð main board and all major operating board representation UK and Europe


Education


– BSc in industrial psychology


– MSc in industrial relations


 


 


 

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