Mar­ket­woes?No­tas farasI’m con­cerned

The Jewish Chronicle - - Business - BY CANDICE KRIEGER

PROP­ERTY CHIEF Robert Leigh may be for­given for feel­ing a lit­tle smug. When Mr Leigh, now 29, es­tab­lished his com­mer­cial-prop­erty agency De­vono in 2003, he re­ceived no sup­port from the in­dus­try and was not well­re­ceived by ex­ist­ing agents.

Tra­di­tion­ally, rental-prop­erty agen­cies act on be­half of land­lords to achieve the best deal for them. Mr Leigh’s com­pany, which he runs with busi­ness part­ner Adam Lan­dau, works ex­clu­sively on be­half of ten­ants seek­ing to rent of­fice space in Lon­don. It claims to be the only agency in the cap­i­tal to do so.

Five years on, and De­vono has been named Lon­don’s num­ber-one of­ficefinder by the Es­tates Gazette and the CoStar Prop­erty Group. Last year, it achieved the high­est num­ber of ac­qui­si­tions in Cen­tral Lon­don, more than in­dus­try heavy­weights Jones Lang LaSalle, CB Richard El­lis and DTZ. De­vono placed 83 clients last year, tak­ing a four per cent mar­ket share and £15 mil­lion worth of rent roll. This year, it has moved 60 ten­ants so far and is on course for a £2.5m turnover.

“Com­mer­cial prop­erty is quite an ar­chaic, old-fash­ioned in­dus­try,” says Mr Leigh, who was re­cently named as one of the most suc­cess­fully en­trepreneurs in the UK by Young Guns, an ini­tia­tive that cel­e­brates in­di­vid­u­als un­der 35 ex­celling in busi­ness. “When I came to the mar­ket, it wasn’t a well-re­ceived prod­uct among ex­ist­ing agents. They didn’t like the con­cept be­cause it was change. There was a lot of crit­i­cism be­hind De­vono’s back. Now, we have gained their re­spect through the deals we have done.”

De­vono clients in­clude Manch­ester United, Uni­ver­sal and Eon. “We were do­ing of­fice view­ing with the Glaz­ers for Manch­ester United. “We are deal­ing with peo­ple of a very high level, who rec­om­mend us. We are now a se­ri­ous player within the com­mer­cial mar­ket.”

W h a t m a k e s them so suc­cess­ful? “When it comes to ten­ants, we have no con­flicts of in­ter­ests. Our loy­alty is with them. We can tell them how bad the mar­ket re­ally is. We can be ab­so­lutely trans­par­ent. What the mar­ket does is ir­rel­e­vant for us. It only af­fects us if there are fewer busi­nesses looking to move.”

Mr Lan­dau, 29, adds: “We are not stuck with space that we need to dis­pose of. We don’t have land­lords breath­ing down our neck.”

De­vono’s job is to find clients a build­ing and, with more prop­er­ties be­com­ing avail­able, Mr Leigh is pretty up­beat. “Now is a good op­por­tu­nity for us. A lot more bank-end leases are com­ing to the mar­ket where land­lords need to dis­pose of their space.

“Twelve months ago we were in a land­lords’ mar­ket, now the shoe is now firmly on the ten­ant’s foot in the City. It’s slowly get­ting that way in the West End.

“Every­one says the mar­ket is get­ting worse but it’s not get­ting worse for ten­ants, it’s get­ting bet­ter.”

A for­mer JFS pupil, Mr Leigh be­gan his prop­erty ca­reer in the mid-90s, work­ing in the res­i­den­tial sec­tor. He then moved into the com­mer­cial side and be­came a part­ner in a small agency. He raised £40,000 through the Gov­ern­ment-backed Small Firms Loan Guar­an­tee Scheme, in ad­di­tion to £20,000 of his own money to set up De­vono. He re­paid the bor­row­ing within three months, “af­ter a cou­ple of deals”, and landed his first big deal within four. This was with gov­ern­ment-funded or­gan­i­sa­tion Con­struct­ing Ex­cel­lence for a great big fee, as Mr Leigh puts it.

He ac­knowl­edges that he has had it pretty easy since then. “Young peo­ple — those un­der 30 — have only known good times. This is the first down­turn I have wit­nessed and if I said it wasn’t some­thing that was on my mind I’d be ly­ing. But un­like res­i­den­tial prop­erty, busi­nesses have to move. They can’t stand still.” How has the mar­ket been af­fected? “The credit crunch in the West End has stayed fairly in­su­lated be­cause there isn’t a lot of of­fice ac­com­moda- tion avail­able there. May­fair rents have stayed fairly firm but no one in this mar­ket place is achiev­ing rents above £100 per sq ft,” says Mr Leigh, who views up to 150 build­ings a week.

“The City is on its knees at the mo­ment. There’s eight mil­lion sq ft of of­fice space un­der construction or com­ing to the mar­ket over the next 12 months. It’s flood­ing the mar­ket with avail­able space. We are run­ning riot in the City and achiev­ing rents of £25 per sq ft be­low quota rents and, on fiveyear leases, as much as 12-month rent­free pe­ri­ods. Land­lords are very nerv- ous. They are think­ing: ‘I just want to let my build­ing be­cause if I don’t, will it be empty for the next few years un­til the mar­ket picks up again?’

“So, rents in the City have dras­ti­cally fallen and the West End mar­ket will slow down over the next six to 12 months, when a lot of busi­nesses un­for­tu­nately go bust. There will be an ex­o­dus of busi­nesses mov­ing to the City, and many com­pa­nies will be down­siz­ing to a more cost-ef­fi­cient space.”

Mr Leigh lives in South Hamp­stead, North-West Lon­don.


De­vono’s Robert Leigh eyes up op­por­tu­ni­ties de­spite the down­turn

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