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The Changing Landscape of Commercial Property: Embracing Customer-Centricity

Explore how the commercial property industry is evolving to become more customer-centric, with a focus on occupier flexibility, investor perspective, and government support. Discover the role of lawyers in supporting this change by providing quick, simple, and certain solutions and managing expectations in a litigious society.

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The Changing Landscape of Commercial Property: Embracing Customer-Centricity

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  1. Commercial Property A New Industry for a New Century Property Litigation Association Conference Liz Peace, Chief Executive British Property Federation 8 April 2005 – Keble College, Oxford

  2. An old industry with a bad reputation Sharks! “Property is theft” Proudhon 1860

  3. Government perceptions Threat of lease legislation Stamp Duty up to 4% Closure of tax loopholes Development Land Tax Planning Regulation

  4. The Customers’ View I am the LORD in landlord You are the ANT in tenant Anon Occupiers remain frustrated by the adversarial nature of the property industry Occupiers see the industry as ‘self-serving’ rather than customer serving BCO survey 2005 ‘On a day to day basis, UK landlords are typically uncomfortable to work with. Communication with landlords (which can be via the managing agent) tends to be very formal and invariably in writing’ RICS Tenant Satisfaction Index (39/100) Feb 2005

  5. Investor Perspective Why Property? • BUT • Cost of entry too high • Too complex/too lumpy • No retail products • The preserve of the wealthy • Go for the easy BTL option Source: IPD

  6. But the industry is changing Provider of occupier flexibility Partner in urban and social renewal Servant of the customer Investors’ friend Supporter of environmental sustainability

  7. Customers flexible lease lengths flexible lease terms different types of tenure sub-letting/assignment speed and simplicity a range of services Landlord and Tenant Act Reform? simplified lease documentation reduced intermediary involvement basic business advice

  8. simple structures/ speedy transaction transparency and information consumer protection Investors £35 billionof potential retail investment a BTL industry worth £40bn Real Estate Investment Trusts Authorised Investment Funds

  9. Government and Society promotion of BIDs participation in neighbourhood/underserved markets programme partner in major regeneration schemes funding infrastructure through S.106 agreements novel forms of partnering and funding faster, better planning simplified S.106 negotiations

  10. Environment energy and utility efficiency – EPBD waste management security accessibility safe, sustainable construction modern forms of contract better, more comprehensible information compliance with spirit & letter of environmental legislation

  11. Government The commercial property industry is:- a major contributor to economic growth - 6% of GDP a significant source of taxation - £30.5bn or 7.7% of total tax take a creator of capital - £46bn per annum (30% of UK total) provider of £85bn of investment for pension funds/savers sound/swift transaction support tax avoidance, tax planning or simply pay up! corporate governance

  12. In conclusion ? • the industry is changing • the customer is becoming king • part of sophisticated capital market • a retail investment option • an urban regenerator • environmentally sympathetic

  13. How do lawyers support this change? providing solutions that are quick, simple and certain managing expectations in an increasingly litigious society avoiding litigation taking a holistic view

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