Despite recent successes in co-ordinating efforts, the industry is still too fragmented. Greater coherence would achieve more, argues Liz Peace
When I joined the UK property industry over six years ago, we were in the middle of an intensive period of soul-searching about how the industry represented itself to government and the wider world. The general feeling seemed to be that there were too many representative bodies and this was not only expensive for those paying the subscriptions, it was also inefficient and allowed government and other stakeholders effectively to ‘divide and rule' when there were big subjects on which we were trying to lobby.
What I quickly discovered was that neither our industry nor the UK was in any way unique in having a multitude of representative bodies. Indeed, compared with some industries - construction in particular - we seemed positively restrained! But I would contend that this is no reason for complacency and that as an industry we still have a long way to go to ensure that we really do present our case in the best possible way at the national, European and, increasingly, global level.
Looking at the national situation in the UK, I am pleased to report that our first attempt at industry consolidation is alive and well. In April 2006, four of the industry representative bodies - ourselves, the Investment Property Forum (IPF), the British Council for Offices (BCO) and the Royal Institution of Chartered Surveyors (RICS) - decided, on the back of the successful pan-industry REITs campaign, to form something called the Property Industry Alliance.
This organisation intended to ensure that we did not duplicate our efforts on major industry campaigns and that we played to the strengths of the component bodies in assigning a lead for key topics of importance. As a result, the BPF leads on REIT lobbying, the IPF on a co-ordinated approach to industry research, the RICS on occupier satisfaction and the BPF, with support from the BCO, on issues to do with sustainability. Our sustainability committee, known as the Green Property Alliance, also has as members the British Council for Shopping Centres, the British Retail Consortium and the Green Building Council. Moreover, the chairman of the PIA, Sir David Clementi, has recently conducted a review of the Alliance and concluded on the back of the opinions garnered from the members that there is a strong wish for the body to continue and perhaps even undergo a modest expansion. This is still a limited initiative and there are probably grounds for it to be more wide-ranging and all-embracing than it is - but at last it is a beginning.
I wouldn't presume to comment on the situation in some of the other major European jurisdictions - other than to observe that there is clearly scope for consolidation. Looking at Europe as a whole, however, is a different matter.
At the moment we have three significant pan-European players - EPRA, INREV and the European Property Federation (EPF) - whose interests are becoming more closely intertwined. RICS is also a significant player in Brussels given its extensive, growing European membership. In the past, the interests of these bodies tended to stay largely separate. This is no longer the case, with a well-documented disagreement between EPRA and the EPF on how to lobby for REITs in Europe, involvement by the EPF in the Commission's consultation on open-ended real estate funds - arguably an area for INREV, and EPRA's increasing interest in matters to do with sustainability and environmental performance, traditionally a preserve of the EPF.
This does not help the property industry in Europe since the Commission is undoubtedly more impressed by those organisations that can command obvious and wide-ranging support. The EU-REIT Coalition, assembled by the EPF and comprising the European Landowners' Organisation, RICS and TeGOVA, has clearly attracted more EU attention than if the EPF had decided to go it alone. My blueprint for the future would, therefore, be for EPRA and INREV to enter into some form of alliance and enlist the support of the EPF on those subjects that require approaches to be made to the Commission or Parliament. It would make sense for EPRA and the EPF to agree to work together straightaway on REIT lobbying so as to avoid the ridiculous position whereby each is preparing position papers on how to approach REITs. One can only wonder at the reaction of senior officials in the Commission and the commissioners were they to receive two separate documents saying different things on a subject on which the industry ought to be united.
But industry co-operation should not stop at the European level. We are now a global industry and there are an increasing number of subjects that need to be tackled from a truly international perspective. An unofficial coalition of national and regional representative bodies came together to work with the OECD on aspects of the model tax treaty that affected cross-border investment in REITs and as a result we have already achieved one significant change.
On the back of that success, a grouping of the major national and regional REIT associations has also now come together as the Real Estate Equities Securitisation Alliance (REESA) to manage the lobbying for further change and also to work with the International Accounting Standards Board (IASB) on its proposals for new accounting standards, which seem to ignore some of the needs of the real estate industry. Notably the IASB barely gives a second glance to national bodies and will only work with those who can show a truly international representation.
And on the subject of sustainability, where there is a plethora of international bodies lining up to tell the property industry what it should be doing, it is going to be equally important that we work together across national boundaries. That is why at MIPIM this year we brought together representatives from 12 countries across the world to discuss with the Global Reporting Initiative how we might best support their project for a real estate sector supplement to their G3 Framework.
Getting the property industry to work together for the good of the industry as a whole ought to be a no-brainer. But that ignores those very human tendencies that drive us towards separation, protectionism and, on occasions, even conflict.
We need to strive to overcome these tendencies because now there is even greater need for us to stick together to overcome some difficult market conditions and potentially unhelpful bureaucratic interventions. Individually none of us can claim the prerogative to speak for the industry as a whole; working together we might just achieve some of those things that a few years ago we would have considered beyond our reach.
Liz Peace is chief executive of the British Property Foundation
