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PROPERTY REGENERATION

It is people and communities that regenerate a new area and that the best developers and developments are those which lead with a people focus.

Words by: Michael Dibley

Michael Dibley of Dibley Property is a London based Property Agent who sports Japanese selvedge denim, Red Wings Iron Rangers and thankfully we have never seen him in a tie or taking an important call on his ‘mobile’. With a genuine love for people, hospitality, community and years of experience in the Property Industry working on both the LandLord and Tenant sides of the deal, in 2016 Mike decided it was time to set out on his own and establish Dibley Property. He works with a core group of valued, interesting and diverse clients, providing specifically tailored expert advice. Working with clients from Gap to Tom Dixon to Ozone Coffee Roasters, Mike believes that it is people and communities that regenerate a new area and that the best developers and developments are those which lead with a people focus. Here he discusses how independent hospitality operators work best alongside landlords to drive regeneration of an urban area, and what to look out for when researching a site or area and considering a new lease.

THE ROLE OF HOSPITALITY IN THE REGENERATION OF URBAN AREAS:

Organic regeneration of urban areas often starts with creative people moving into redundant buildings and creating a new and vibrant community. Artists are often the first to find these areas and establish themselves, followed by galleries, hipsters, designers, coffee shops, pop-up bars and restaurants and eventually, property speculators and developers! Typically, the property in these areas is rarely in single ownership so there is no opportunity for big developers or landlords to exert ultimate control.

However, in big cities, much of the redevelopment is not so natural and organic. London for example, is dominated by large landed estates such as The Crown, Grosvenor, and Cadogan who compete with property companies like Capital & Counties in Covent Garden and Shaftesbury whose estates include Carnaby, Seven Dials and Berwick Street. Other large areas of land are often controlled by local authorities, city councils and railways. As a result, the regeneration of areas of such control can sometimes feel forced or fake – this is where the role of the independent hospitality operator can be vital to a development’s success and credibility.

If an urban area undergoes this kind of strategic landlord regeneration, it is usually an area which is run-down, forgotten, abandoned or at worst, has become a no-go area. Humanising these areas means creating an environment people want to visit and more importantly stay, dwell-in, enjoy and value. Whether it is a large scale urban area or a single building, the best examples of regeneration include good public spaces, promote accessibility, celebrate the heritage and architecture, and show commitment to long-term success.

This is now commonly referred to as ‘place-making’ and it is generally accepted that a vibrant and wide mix of uses is essential. Hospitality is one of the most important uses and often is essential to successful regeneration – providing animation to public spaces, creating an early destination and an amenity to the long-term community whether it be residents and/or workers as well as visitors.

Independent hospitality operators provide a point of difference and a reason to visit an area or development. This can be before, during the regeneration or once the development is completed. Therefore, whether the operator is a street-food stall, a start-up business or a well-established local indie or say a named chef, each has a role to play in the regeneration of that area.

Developments may offer businesses short-term opportunities during the processes of site assembly including obtaining vacant possession and planning permission which can often take many years. These opportunities range from pop-up bar/restaurants to street-food markets. This can lead to semi-permanent business opportunities for the hospitality sector. A successful operation that becomes part of the fabric of an estate or urban area may even give the developer the comfort to take more time before implementing their permanent plans.

Successful regeneration of an urban area often starts with public spaces and making these immediately and continually accessible during the construction process. The best way to activate public spaces is with hospitality whether it be a coffee cart, temporary theatre or markets and street-food.

So, with these opportunities in mind, what makes hospitality businesses attractive to developers? Landlords are always looking for the newest trends, a first-of-a-kind or simply, the next best thing. With big cities competing for leisure and tourism with other global locations, it is important the landlord can set their property or estate apart from others. This attracts visitors and keeps locations fresh and vibrant, and attracting an interesting hospitality operator can be very beneficial when marketing the other uses within a scheme.

Whilst landowners often have a ‘tenant mix policy’, the urban regeneration process often means developers have a different requirement depending on the type of property, area and point in time. For example, local businesses help the developer engage with the existing communities who can often be sceptical of developers’ intentions towards ‘regeneration’.

THE RELATIONSHIP BETWEEN HOSPITALITY OPERATOR AND THE DEVELOPER:

Attractive hospitality businesses will have strong communications through social and standard media, good reputation via word of mouth, and publications like you are reading now! Landlords and developers invest heavily in their own communications and as such they react well to businesses that answer these directly. For example, Argent produces Kiosk, Neighbourhood Essays, NIC and Derwent has its own publication, Space. A well-designed brand (or “landlord”) pack helps the developer understand the business and its brand values as well as acting as a temptation, so I always encourage clients to invest in this material.

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It is as important to demonstrate to the landlord your own commitment to the project as it is to expect them to understand and appreciate your business and the benefits you will bring to their project. Promoting collaboration and a flexible approach will appeal to the landlord and make your proposals stand out, particularly when in tune with the regeneration plans. Can you take more/less space, can you provide a one-off concept, can you introduce retail or other uses to complement the hospitality offer? Yes! Of course, we can!

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Other appealing business attributes include provenance (especially if local), makers, green credentials, healthy product, and an investment in people – your own staff, suppliers, customers and the existing local community. Joint ventures outside of the hospitality business are another way to be part of a development or regeneration project. This could take the form of a store-store or providing the hospitality to an alternative use. Stevie Parle and Tom Dixon often collaborate in these ways and Fernandez & Wells have a café in Jigsaw’s Duke Street Emporium.

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Be prepared. Make sure your funding is secured and in place, you have a well thought out business plan, if possible, a design concept or story board, and finally either an understanding of the property industry or a good advisor!

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When considering a lease remember it is a binding legal contract, and is often for a long-term of 5-25 years with periodic and future liabilities like rent increases and reinstatement provisions let alone controls over use and the ability to trade your asset or reduce your liability. Remember too, before you sign the final agreement, you should consider what is going on around you – has the building been sufficiently finished, will you have any or a critical mass of neighbours, and is the landlord helping and supporting you in the same spirit of collaboration when you started your relationship?

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Your tool-kit should include turnover related rents, index-linked or fixed rent reviews, rent free periods, landlord capital contributions, and break options. Be wary of overly controlling landlords and developers. It is common and often acceptable for a landlord to seek restrictions on use and alienation such as pre-emption or offer-back clauses.

Experienced and responsible developers will look for measures to create and preserve a vibrant and considered mix of uses and complementary occupiers, and this should be championed. However, the level of control should not hinder creativity, trade and should allow the business to manage itself accordingly. Developments and properties can become over ‘curated’ and/or the mix can be diluted by financial expectations from investors and funders. Likewise, public spaces and wider estates can be sterile and harsh environments when over-managed or policed. Look for long lasting commitment and an open policy like the Olympic Park and Granary Square in London or New York’s Highline. Regenerating an urban area whether organically or through development should be a great journey for all parties involved. It should be an exciting process and it should be fun. You should enjoy working with the landlord or developer even if the process is challenging and often longer than expected. You will get there – eventually!

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