Power of Existing Relationships

There is power in existing relationships.  The power results from the interaction and trust that builds as two parties work together to accomplish a common goal such as selling or leasing property.  During the various phases of the interaction, the parties can view performance, attitude, work ethic, general ethics, critical thinking skills, organizational skills, commercial skills, drive, achievement of results, oral and written skills and a host of other components of performance.  Successful results coupled with common attributes of performance lead to repeat business.

The statistics bear this out.  Government research shows that long term incumbent suppliers are successful 80% of the time in retaining the business.  Organizations with strong existing working relationships are successful 40% of the time.  Organizations without a meaningful existing working relationship are successful only 10 to 20% of the time.

There are two critical lessons from these statistics and thought process:

  • Build meaningful relationships to secure long term business
  • Cautiously bid for new business where existing relationships have not yet been formulated

NAI Global has a strong track record on long term performance with our clients who have worked with us over multiple decades.  Our results mirror the analytical results shown above.  Wouldn’t you rather work with someone who is interested in your long term success rather than short term gratification?

-Ted Parcel

Ted Parcel is Executive Vice President of Corporate Services for NAI Global.

Beginning of the End, or End of the Beginning?

Today is the day that Britain steps back from the brink” so said Britain’s Chancellor George Osborne yesterday as he presented the Coalition Governments plans to eliminate the £109 billion structural deficit during the lifetime of this Parliament.

Osborne inherited the biggest budget deficit of any leading economy. But the question is: will his plans involving £81 billion of public spending cuts and the loss of almost 500,000 public sector jobs save the country, or push it over the edge into a double dip recession?

The city, primed over recent weeks to expect the worst, received the Chancellor’s news relatively calmly. Certainly we did not see rioting on the streets at the announcement of the rise in the state pension age to 66 for men and women by 2020, saving £5 billion a year.

In total, around £18 billion of savings will come from cutting welfare costs. Local Government took the deepest of the cuts overall, The Department of Communities and Local Government faces a 51% reduction in its budget to £3.2 billion. The cut of 26% in the Local Government Grant to £24.2 billion will have shocked Local Authorities, but no doubt it’s we the public who will suffer with harsh cutbacks predicted in the level of serving provided to none essential services such as parks, leisure centres etc.

Despite the cuts, it’s not been all bad news; the Chancellor has sought to achieve a delicate balance between austerity v stimulus. As promised, Health and Schools spending were protected and the Chancellor found more cash for areas that could boost Britain’s future growth, including investment in science and confirmation that Crossrail, the £16 billion east-west new rail line in London, will proceed.

Certainly for property the effective removal of demand from the Government as a major new property occupier will be doing little to cheer the markets. However with an effective freeze on Government lease renewals for some weeks this has been anticipated and perhaps already built into market sentiment.

The issue remains: how will the rest of the world react to the austerity plans announced by the UK Government? Will the plans announced yesterday in the UK spur other Governments on to grasp the nettle? Only time will tell and in the meantime we must all take our medicine and hope that this is the end of the beginning and there will be brighter times ahead.

-Paul Danks

Based in London, Paul Danks is NAI Global’s Senior Vice President of Corporate Services working with clients across Europe, the Middle East and Africa.

Appetite for Investment Increasing?

What a difference a year or two makes. Having visited ExpoReal in Munich this year, what a very different place. Two years ago funds and banks were going into receivership and everyone was in shock and last year nobody really knew what was happening. This year the exhibition was buzzing.

SWIP and CW and I launched a €500 million pan European fund targeting city centre retail funds,  Henderson launched its first German retail fund  looking to raise €100 million by the end of 2010.  Allianz is looking to significantly grow its Scandinavian portfolio. They are looking at retail and office assets. ING is launching a pan European sustainable office fund. Invesco is launching a second European hotel fund as well

The developers too were there. Prologis reported that it wants to shift more towards Europe and Asia.  They currently have 232 properties and 4.9 million square feet in Europe.

It shows that the appetite for investments is returning. There is, however, still a gap between the aspirations of sellers and buyers and lack of the required product.

So with the German funds seeing an inflow of €8 billion in August according to the BVI the appetite is there. However there remained an outflow in the money markets and open ended fund redemptions.

So its back to the Bier and Weisswurste!

-Patricia LeMarechal, BSc, MRICS, SIOR

Based in the UK, Patricia LeMarechal is Vice President of International Client Development for NAI Global and a member of the International Advisory Council of The Society of Industrial and Office Realtors (SIOR).