REMIT 20 - March 2020: How COVID-19 challenged property managers and investors
WHAT: Providing a forum for the property sector to meet and discuss the challenges and formulate a response to the national lockdown and its impact on the property markets, as the crisis unfolded.
WHY: Bringing together industry leaders and senior executives, enabling them to share their thoughts and observations, helping them develop strategies and tactics in response to the unfolding COVID-19 crisis in 2020.
WHEN: March 2020 - present day
It’s not every day that your first phone call is from the Head of Property Management at a global real estate firm. However, Tuesday 24 March 2020 was a day like no other.
It was the day after the UK Government announced, in response to the Covid-19 pandemic, that the country would go into lockdown and, overnight, without being able to open their doors, thousands of businesses were potentially facing an existential crisis. The markets, gripped by panic, were thrown into turmoil and investors, and their property managers, had woken that morning to the realisation that, with businesses nationwide being forced to close their doors, rent and service charge collections were going to be hit badly. Very badly.
In its most basic form, property investment is about collecting rent, and for the previous decade, Remit Consulting had been collecting, and analysing, data on rent and service charge collection rates as part of its REMark research project. Since its inception in 2020, REMark had also enabled the team, as a trusted and independent consultant to develop an extensive, national, network of property and asset managers that had become a veritable Who’s Who of property and asset management.
That morning’s phone call to founding partner Andrew Waller was from Nick Herward, Executive Director and Head of Property Management for UK and Europe at Savills, asking, “How soon can you get all the national heads of property management together?” and an online meeting was hastily arranged for the very next day. Coincidentally, this was March Quarter Day, the very day that rent and service charge payments were due to be paid for the next three months. The meeting brought together industry leaders and senior executives representing financial institutions and major investors and enabled those present to share their thoughts and observations on the unfolding crisis, helping them to develop a strategy and tactics in response to the situation.
““At a time of rapid change when everyone was feeling their way through what was uncharted territory it was very helpful to have had a forum to discuss the unprecedented range of issues facing the property management community and in turn give good advice to our clients. Remit facilitated this in a way that ensured no one stood on ceremony - I recall everyone was open with their thoughts and experiences which allowed all of us to learn. Well done Remit Consulting.” ”
It was also agreed that the online forum would continue on a weekly basis, providing the property and asset managers with an ongoing opportunity to share their experiences and concerns, and work together to find best practice solutions to the often-business critical challenges of lockdown. These included establishing the implications for occupiers of the government’s furlough scheme, whether mothballing large buildings might be an option, and how to manage service charges and empty building costs during lockdown.
What became apparent was that without understanding rent and service charge collection statistics, it was impossible for the property managers to make any decisions regarding their budgets or building management, and so it was agreed that, with the support of investors, property and asset managers, the REMark study should be undertaken at five intervals each financial quarter, to provide the real estate industry (and the government) with up-to-date information on the market. The REMark analysis was also expanded to provide data weekly based on 125,000 leases; a data pool created by the property managers requesting the information.
Over the first few weeks, the issue of service charge collection and rates continued to be a critical issue, and the challenges of recasting budgets were made worse by the constantly changing landscape, where cash flow was both reduced and uncertain. The data produced by REMark became a crucial metric for the industry
It was collaboration at its best.
“I should take the opportunity to thank Remit for their leadership role in bringing together the PM stakeholders which has added value to the industry.”
REMark remains an important benchmark metric for the industry today, allowing property managers to monitor their rent and service charge collection rates and identify weaknesses in payments in particular subsectors. It is an exemplar of industry collaboration regarding data sharing and transparency, that would not have been possible without the support of the members of the Property Managers and Property Asset Managers forums.
Remit Consulting is truly grateful for this industry support, which it continues to receive, and hopes that we can look back at the period as an example of productive cooperation and not just banana bread recipes, bad haircuts and Zoom quizzes.