The Midas Touch
Welcome to "The Midas Touch", the first quarterly newsletter produced by the business property consultancy, Midas Corporate Consulting. As you may already know, we work with organisations to maximise the contribution that property can make to their business strategy and commercial objectives.
The aim of our newsletter is to provide you with views on current trends and practical tips that will help you consider your business practice and management of commercial property. We will highlight innovative property practises for businesses and not for profit organisations and share with you our experiences and solutions.
We would also be delighted to hear from you if there are any issues that you would like us to consider or discuss. So please feel free to contact Midas if you would like to do so.
If you like what you read then do forward this on to any of your colleagues or business associates who you think would find our newsletter valuable.
As this is our first edition let us introduce you to our team:
Andrew Pegg
Andrew is a Chartered Surveyor with more than 18 years experience of working in the public, private and not for profit sectors, both in-house and as a consultant. His experience for clients includes major projects:
- Working in house on the restructuring of the operational property portfolio of United Business Media
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identifying development opportunities and strategy to exit a problematic site at Culverhouse Cross, Cardiff for HTV and
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applying a commercial overview on the provision of temporary and new sites for the UK and European expansion of Capital One Bank;
Andrew is a member of the Royal Institution of Chartered Surveyors' Management Consultancy Faculty and Assessor of Professional Competence and has a BSc (Hons) in Land Management. This May, Andrew and Chido (see below) joined the Institute of Management Consultants as members in recognition of the distinctive management approach that Midas applies to its work.
Chido has an in-depth knowledge of property from an investor, developer and occupier perspective to develop sustainable and robust strategies for clients. He diagnoses property problems using a sophisticated trouble-shooting tool-kit, which Midas has developed to measure the impact of practical property solutions and strategies on the balance sheet and profit and loss.
Chido was Principal Analyst on a number of exciting 'landmark' projects in the UK, including BT's Property outsourcing of its Corporate Services Division to Land Securities Trillium and developing Capital One's European Headquarters. He has a BSc in Land Management and Development and an MSc in Property Investment and Finance from Cass Business School.
Julian brings more than 30 years of experience as a Chartered Surveyor to Midas. He has held senior posts in a variety of large organisations, providing effective operational property services for the Royal Borough of Windsor and Maidenhead, Barclays Bank, and subsequently, as Head of Estates and National Contracts at the Employment Service.
The latter role involved Julian being responsible for leading the review and re-organisation of their estates operations and property holdings.
Julian is passionate about the role that premises play in business success and in maximizing staff potential and effectiveness.
He is a Fellow of the Royal Institution of Chartered Surveyors, Fellow of the Institute of Management Consultancy (Northern Regional Chair since 2003) and a contributor to MBA courses on the subject of Premises Resource Strategies.
Wendy is the indispensable Team PA at Midas who is the first point of contact for clients and is there to point people in the right direction.
She also supports Anne Bacon, Marketing Director in setting up new business appointments and Events.
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Developments in the world of corporate property...
In this edition...
Third Anniversary of Midas
Midas celebrates its third year of business this May. The consultancy was set up by managing director Andrew Pegg after he realised that there were few consultancies in the property world that were exclusively serving the needs of occupiers. "I saw there was a huge gap between what businesses wanted and what traditional property advisers were providing. Most people in the property industry working for occupiers also work for the landlord or supply side and tend to offer standard solutions. There is often knowledge or resources gap between what the customer needs and how that need is fulfilled," reflects Andrew. "It was a light-bulb moment when I realised that Midas could fill that gap."
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Tips and Tools for the busy business
Midas has a range of tools available to our clients. We recently developed a property diagnostic tool for Business Link for London. This means that companies can start to review their property and identify any property related issues affecting their business. The output is a summary report highlighting key issues and an initial action plan to have them addressed.
The Diagnostic was designed for SME companies but it can be applied to any organisation with property interests...
To find out more please contact Midas.
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Risk analysis of property portfolio
helps client to strike gold:
Last autumn, a media group commissioned Midas to perform a portfolio review to look at the inherent opportunities and risks in its 30 sites across the UK. As a consequence of its work, Midas identified an action plan to help support the consolidation of business operations at key sites and address inherent and sometimes unforeseen property risks.
Early successes have resulted in the disposal of surplus and vacant space ahead of time and budget - two transactions resulted in cost savings of around £500,000. "We gave the Main Board clarity around a number of property risks and a management capability to address them including financial frameworks to help the decision making process," comments Andrew.
Innovative new ways to deal with property for media client
In July last year, a subsidiary of a UK-based magazine publisher asked Midas for a second opinion on the disposal of surplus office space. It had concerns whether its agents were doing all they could to let the surplus 30,000 sq ft in one of their main buildings.
"They wanted an independent view of how well their national and local agents were performing in the marketing of the space," reveals Andrew. "We did some mystery shopping which involved posing as occupiers looking for properties and we found that our client's space was to all intent and purposes not being prioritised by those agents."
We concluded that the way the business was moving, the problem of surplus space was likely to double within a few years.
The consultancy then reviewed the activity or take up in the local market. It concluded that the client wouldn't be able to lease it in the foreseeable future, as most of the lettings in this particular town were for small businesses often occupying no more than 1,000 sq ft. "We identified that short-team leasing was not going to solve the problem and that the business needed a radical solution," says Andrew.
Midas initiated talks with the landlord about the restructuring of the lease, including sub-letting at below the passing rent and urged the landlord to look at redevelopment for alternative use, such as hotel, student accommodation or mixed use.
The parties are currently considering these options. "We provided the client with clarity about the true extent of their problem and identified a previously unseen way of exiting from a long term problem," reflects Andrew. "There is now a new opening for how property is held within the group and a real opportunity for effectively terminating liability for the unwanted space."
Midas points the way to business
success for ICT giant:
This year, we were asked to consider how a multi-national ICT company might introduce a shared services model to support its business operations across Europe, Scandinavia and beyond.
"We are advising them on what operating model would be appropriate and how they might set that up, focusing on property as an example," explains Andrew.
He added: "We were called in to provide an independent view on the desirability of such a system and the difficulties there might be on implementation. One of the first things we considered was the success of other companies with adopting Integrated Facilities Management in Europe which is not as advanced generally as in the UK".
The Midas team has recommended an alternative approach that is designed to assist future planning and co-ordination of the businesses while promoting best practice.
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Standpoint: Are the property and construction markets focused on providing occupiers with the best long-term value? Andrew Pegg, managing director for Midas business property consultancy argues that the property industry is failing its clients.
We don't believe that the best interests of occupiers are generally served by the property industry. The property market is driven by the landlord's need for rising values, certainty and risk avoidance whereas occupiers often need cost stability, flexibility in response to rapid business change, efficient property available at the right time and any non business risk managed by those best placed to deal with it.
This situation is compounded by the traditional remuneration structure employed by many property consultants and agents geared to the transaction value which is not to the benefit of the occupier client.
For example, with remuneration based on the quantum of property value - ie the amount of space taken and its unit cost, agents quantify the value of their property advice in simple financial terms and look at volume and value over total cost and efficiency.
This dynamic exacerbates the problem of inefficient use of space by the business world in the UK, which the RICS estimated to be £18bn pa in 2002.
This is understandable as the agent's remit is often simply to satisfy the occupier's perceived requirements, rather than work with the client to identify the underlying or long-term needs for the organisation.
They are realising the importance of achieving the right solution- one that unlocks the value of the business potential, improves productivity, minimises risk and contains cost to an affordable level. To achieve this requires an independent impartial and objective, strategic approach that takes into account the competing needs of the business and integrates property with the future organisational strategy and objectives.
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Midas will be holding a seminar this autumn on the future of outsourcing and the role of consultants. Details are to be confirmed but if you would like to learn more then please contact Midas.
Something to say? We welcome contributions from readers on topical property issues. We are also happy to answer readers' property questions concerning any of the articles in the newsletter.
If you have a burning issue or question that you would like some help or advice, then please contact Midas.
Andrew takes to his bike to raise money for charity
Andrew is participating in a 58-mile bike ride from London to Brighton on the 18th June to raise money for the British Heart Foundation. "The original intention was to get back into shape after my accident last November that put me out of action for three months," recalls Andrew. "The Ride is even more poignant now that my father is recovering from a heart attack earlier this month." If you'd like to sponsor Andrew on the Brighton Bike Ride, please visit his sponsorship page.
And finally, please let us know what you think:
We hope you've found our first newsletter valuable. We are always looking for ways to add value and give our customers the information that will support them in developing their property needs. We'd therefore welcome your feedback on this our first edition telling us what other information and news you'd like to read about that will support you in managing your property to best effect.
We would welcome the opportunity of meeting with you to discuss your business property issues.
Please contact our PA, Wendy Slane, if you wish to arrange a consultation or discuss a business need on 0870 242 0472.
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