Views • 10/03/2025 • 4-min read
A note from our CEO, Louise Bonham
Reflecting on the market and geopolitical upheavals of January 2025, CEO Louise Bonham shares her thoughts on what is certain in turbulent times — and the path forward for commercial real estate. And it all starts with a rather unexpected question:
What do a property operator, canary, coughing elf and the bond markets have in common?
When our seven year-old Elf (Elf number 6 of 29 since you ask…) started coughing during the school Christmas show, we knew that a dreadful December lurgy could be upon all of us by the time Granny gave out the Christmas pyjamas. However, on the certainty table, the coughing elf is far below the canary as leading indicators go. When coal miners of decades past saw their canary companions flutter out of sight, they could be almost 100% sure that it was time to follow them toward safety and away from carbon monoxide.
If the recent spike in the 10-year treasury yield was also a songbird, its (somewhat strange) tune would simply tell us that the market is concerned about higher rates and inflation coming down the track. However, unlike in 2022 where it was easy for many to point to the mini-budget (not a discussion for today given the recent legal letter sent by Liz Truss to Keir Starmer!) the factors currently in the picture and their associated certainty vary considerably depending on who you ask.
This time around, most people agree that increased employer taxation, anxiety around potential tariffs and uncertainty around the best policy environment for growth are making the markets jumpy. Coupled with the economic risks to the UK posed by unpredictable geopolitical developments, there is a lot to consider.
We’re probably not the first to tell you that there’s a lot of uncertainty in the market. That’s why, in partnership with our clients, we’re studying a broad spectrum of scenarios to ensure we are prepared for all outcomes that might face our clients’ assets. Indeed, we see ourselves and a large part of our role to act as a leading indicator in the industry.
Right now, we see a mixed picture in the macro-economic and property markets. With plenty of more positive indicators out there and the individual features of each property becoming ever-more important to occupier decision-making, we are focused on what IS certain as well as what isn’t.
We can say a few things for certain:
- The impact of the October budget and inflation on service charge budgets: Our specialist service charge team is working within and across all our teams to provide our clients with options that suit their needs – whether they are looking to reduce costs or enhance their service levels to better support lettings and attract occupiers;
- Supporting our clients who are stepping back into the market with operational due diligence and acquisition surveys on their assets: We can be a sounding board or provide clear areas of challenge to valuations;
- Focusing on readiness for sale: Our transition team is convening all our specialists to pull together the information needed to prevent delays or concern creeping in from hesitant buyers around lack of information. Our Building Consultancy team are preparing vendor reports to ease the transaction process;
- Ensuring that occupiers are retained and leasing supported: Our client management teams are agreeing strategies with our clients on how best to approach all occupiers within their decision-making window as well as on how to best support the lettings process to maximise each opportunity. As many of our clients consider how to retain, invest and ultimately grow revenue, we can step up to shuffle the deck and piece the occupancy puzzle together, ensuring we make space to prepare for refurbs and decarbonisation in a phased approach.
To address what’s less certain:
It’s been said since 2017/18 that the role of property operators has been redefined. We’re now partners stepping up to meet the growing demands for service, operational excellence, ESG improvement and investor alignment, no longer simply rent collectors or dispute arbitrators. I can recommend our founder, Nigel’s ‘Dinosaurs’ note from December 2023, summarising this recent era of property management.
Back to 2025, we feel the mixed economic signals as well as the ever-changing make-up of our industry call for another paradigm shift in our role. As our clients’ operating partner, we stand in their shoes, deliver today’s strategy for their assets and provide as much visibility of and flexibility for the future as possible. In this new era, our teams will need to be confident in leading the conversation around the future with the hard and soft data we see on the ground, working with clients to find ways to atomise their strategies into day-to-day operational changes that enhance asset performance.
We know paradigm shifts take time to achieve. We are thinking hard about how we can do even more, and we’re always open to ideas. We believe that our employee ownership structure gives us flexibility to adapt to any scenario. If we’ve learned anything in nearly 30 years as a specialist operator, it’s this: when we do it right, occupier satisfaction, social impact, carbon reduction and the bottom line all benefit.
Of course, the bottom line is never the whole story. We measure our success in terms of the value we add not only to our managed properties, but to people’s lives, including occupiers in the buildings we operate, the communities around them, our colleagues in our supply chain and our own employees, always with our clients’ goals shaping our process. We are working diligently on metrics that make our holistic offering more quantifiable – we love a number at MAPP!
We also love playing our part in re-imagining the future of real estate and are proud to go forward as 2025 unfolds.
