Susan Freeman
Hi, I’m Susan Freeman, welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum where I get to interview some of the key influencers in the fantastic world of real estate and the built environment. Today I am delighted to welcome Guy Grainger. Guy is European Chief Executive at New York stock exchange listed global real estate services company JLL. Overseeing over twelve thousand employees across eighty offices, he sits on the global executive board responsible for the firm’s strategic direction and is also the global executive sponsor for marketing. Previously JLL’s UK CEO and with a background advising retail companies on their real estate strategy he has worked closely with Britain’s biggest businesses and the world’s largest retailers. Guy is also Chair of the Circular Economy Taskforce at responsible business organisation Business in the Community. He is Junior Vice President at the British Property Federation working alongside Vice President David Partridge and this year’s President Helen Gordon. Guy is an established media commentator on the built and natural environment. He is an Alumnus of the London Business School, Senior Executive Programme and an amateur triathlete in his spare time. So now we are going to hear from Guy Grainger on how he has sprinted through the ranks to run a global real estate services firm. Guy welcome to the studio.
Guy Grainger
Thanks Susan.
Susan Freeman
So, your career has been in real estate, when you were growing up did you think no my ambition is to be a Surveyor, how did this all come about?
Guy Grainger
No, first of all I wanted to be an Astronaut of course but soon I managed to limit my expectations, I wanted to be an Architect actually and it is fair to say though in my teenage years I wasn’t the most ambitious. In fact you could say I was quite anonymous so despite what people think of me now that was a time when actually exploring the world was more important to actually what career I wanted to do and architecture with a training period of seven years seemed liked a lot of work so I do have some lazy bones in me or at least I did have at that stage in my life. But I was quite interested as a result in that in development and the built environment and design so I just when I applied for University and polytechnic in those days, I went for real estate as a big bucket because I thought well you never know where it might end up.
Susan Freeman
As you know I think your next career is going to be on the stage, so I don’t know if you have considered that?
Guy Grainger
Well you know it’s a secret of mine, I did go to drama school for two years.
Susan Freeman
Oh, did you?
Guy Grainger
Yeah but it was a secret until I said it now.
Susan Freeman
I didn’t even know that, okay so that makes a lot of sense - so not quite so anonymous. I think you went to Bristol Polytechnic.
Guy Grainger
I did.
Susan Freeman
With quite a few well-known names in real estate and you’ve probably kept in touch along the way.
Guy Grainger
Yeah interestingly through our various journeys there are several people that are at the top of businesses now who were in my year. Colin from Cushman & Wakefield who has got the same role as me; Jo Allen who is the Head of Frogmore so …
Susan Freeman
Who’s been a recent interviewee on the podcast.
Guy Grainger
Has she now?
Susan Freeman
She has.
Guy Grainger
She’s great.
Susan Freeman
So, you joined JLL in 2008 I think as part of the Churston Heard merger?
Guy Grainger
That’s right yeah, we sold our business to JLL. We were a very successful independent retail advisor. I fell into retail by accident but loved it. Really advising the retailers over the years on their location strategy but I really liked it because as a property advisor you’ve got access to the owners of the business and you could see how they have developed a brand everything from the fashion brands, we did a lot of work for Superdry in those days. Working with Julian when he was really running a market stall in Cheltenham, I can’t claim to have known him back then but right up to acquiring a flagship store on Regent Street. Really interesting to get on the inside of those businesses so it was a great learning for me not just about real estate but about how to run a business and how to create a brand that connected with customers and that stayed with me.
Susan Freeman
Do you think it is just a coincidence that JLL, CBRE and Avison Young have retail agents at the helm at the moment or is it something to do with the retail business?
Guy Grainger
I think it is a coincidence, they may answer differently but I think all of those individuals, we do have one thing in common I think they’ve got really strong values in doing the right thing and they are prepared to make decisions for a wider organisation rather than put themselves first and I see that character in several leaders and I think that’s probably what has differentiated them from others rather than the retail experience.
Susan Freeman
So, you started off as Head of Retail at JLL, became UK CEO in 2013 and CEO of the EMEA business in 2016 so pretty rapid trajectory. How would you characterise your leadership style and how has it evolved?
Guy Grainger
I might not be the best person to answer that if I am honest, but a lot of people have said to me ‘wow what a trajectory’, it wasn’t part of the plan. Particularly when we sold Churston Heard to JLL I felt it was a journey of exploration I wanted to see what it was going to be like to work in a multi-national business, a US listed company, it was all new for me and I didn’t know whether I would like it or not and there have been ups and downs I can assure you. As anyone has in any role you have high moments and you have low moments.
Susan Freeman
And are you going to tell me about the downs?
Guy Grainger
Yeah, the downs, the global financial crisis happened a year after we joined JLL and if you are in a leadership position or just in business generally that was very tough. You know we had to let go of a lot of people and when you are a leader you have to make those calls and that affected me emotionally ever since. In fact it has probably made me a better leader because in those dark moments you find out a lot about yourself and you know that actually as you go forward once you’ve been through a crisis like that it stays with you and you realise actually making tough decisions is a way to protect the business and protect the good people in the future so it was a real learning for me and a real low point. I think a lot of people during that time were going home at the end of the day emotional wrecks and I was and it was probably the period when I grew up and so I don’t look back on those times with great fondness but I know that without them I probably wouldn’t be the person I am today.
Susan Freeman
It is a good point because there was a time when there were younger people coming up through real estate and they had only seen the good times and actually you then think you know nothing can go wrong, so I think it’s important.
Guy Grainger
And people probably forget but when I was promoted in the European CEO role within three weeks, we had the referendum which was a shock result at the time, certainly something business didn’t anticipate and it had an immediate impact on the business negatively. So a couple of weeks into the job I suddenly had a fire burning that I didn’t anticipate and actually six weeks into the job we had a coup in Turkey where we’ve got quite a large business and again another fire started burning that I didn’t anticipate so my first hundred days as a leader you often enter those first hundred days with a fresh pair of eyes looking at all the vision and creativity and what the impact you are going to make and I was dealing with immediate problems and again pretty tough times and you have to dig deep again but in very different context so the day of the referendum at 5.00 o’clock in the morning I was sitting on my sofa watching the TV in a state of shock. My phone goes it’s the Global CEO. What are you going to do? That was his first question.
Susan Freeman
And what was your answer?
Guy Grainger
That’s tough. My first answer was I am going to go in and actually comfort some of the people, we’ve got a lot of international people who work in our headquarters in London and it was like someone had just died. There were people in tears, people feeling let down, a lot of non-UK nationals who I spent time with and it was a shock not just in terms of economic business context, it was an emotional shock and at that time people look to leaders for a constant, for calm and so in the immediate aftermath that was a role that had to be played but beyond that it was time to make decisions about what we did as a business, how we responded, where we actually had to cut back and where we had to preserve and again they are tough moments when all eyes are on you and you have to step up.
Susan Freeman
Three years down the line its still you know there’s still a question mark on you know over how it’s going to play out so it must be difficult for you to plan?
Guy Grainger
It has been difficult in 2019 to plan, I think it will get slightly easier now that we have a majority Government. It will be easier to predict how that Government is going to behave. Whether you agree or disagreed with it I think it will be easier to look into the future. There will be future moments of uncertainty about the trade deal I am in no doubt, but we have to live in a world of uncertainty, and I feel more optimistic about being able to plan than I did twelve months ago in the UK.
Susan Freeman
And the JLL business is international so obviously Europe is just a part of it, I mean do you have any thoughts on the role of Europe in relation to, you know the international real estate sector?
Guy Grainger
I have a lot of thoughts on that. In fact I would say that’s been the most interesting part about my job for the last three and a half years as CEO of Europe and the Middle East is that you get to see a completely different context and having worked in the UK for twenty five years previously I thought I knew it all and actually I think a lot of people in UK real estate think they know it all and then you start to see other perspectives, different ways of working, different development styles, different built environments and it has been a true eye opener and a great learning experience. Then beyond Europe you see what happens in the Americas, what happens in Asia, most specifically in China, and you understand actually that since the global financial crisis 80% of the world’s growth has been generated out of the USA and China and that gives you far greater context of the role in Europe and the UK, whether it is in real estate more particularly in technology. Susan I know a subject that you are very passionate about and the technology advances that are being made in those two great nations are immense and I don’t think we should underestimate the influence that will have on the world in the next ten, twenty, thirty years.
Susan Freeman
Well since you’ve mentioned technology, JLL were one of the first real estate companies to set up a strategic venture fund, JLL Spark and I think it is now part of JLL Technologies and your Global CEO has set a strategy for you to become a tech company that works in real estate and is that actually changing the way you work at JLL?
Guy Grainger
It is. I mean let’s be realistic it’s not changing overnight. Technology only works if people use it and the key choices are whether you build that technology yourself, whether you partner or whether you buy technology companies and we’re still learning that. However you can only really make the right choices if you have people with the right qualifications to make those choices and too many real estate people think they know about technology and I am not sure we do and the great change that happened in our organisation was to recruit technology entrepreneurs, experts from Silicon Valley into very senior decision making parts of our business who could make the right choices, put the right metrics for success in place and build business cases around technology that quite frankly looked, made our old business cases look amateur, and that has been a huge difference for us to the extent now that those two tech entrepreneurs sit on our global board and it is very interesting the observations they make about the way we work, about the future of our industry and it has been a hugely positive influence on the people around them.
Susan Freeman
So that should accelerate change in terms of embracing tech and we were both on a Prop Tech panel recently for movers and shakers and one of the quotes that came out of that was ‘it’s time for the property industry to stop flirting with technology and commit to a proper relationship’.
Guy Grainger
Did I say that?
Susan Freeman
Oh possibly. I just wondered what you, what you had in mind in terms of the engagement or the marriage or whatever should be coming out of that?
Guy Grainger
It is commitment and commitment isn’t just talking about things, its following it up with actions and the trouble with technology is it’s very, very expensive and you make mistakes. So too many people in real estate are doing this on the side of their desk. If we are truly going to transform the way we work and create more frictionless client solutions which is what technology is about then you have to commit. You have to commit time and money and whilst it is great to have these tech people at the top of our business you should see some of the requests they are making for investment. It is eyewatering. Luckily, we’ve got a balance sheet that can afford to do it and we’ve got a Global CEO with a vision for five/ten years’ time not just for one to two years’ time. However, you have to make big bets and I think it is not within the business model of many real estate companies to build in the financial capability to make big bets on technology hence they are not committing.
Susan Freeman
And I think one of the issues is that real estate people aren’t prepared to fail, they’re not prepared to you know try something that you know has a good chance of not working and also I think as a sector, very little money goes into research and development anyway so there isn’t the sort of mindset that you know you try things so it must make it difficult to actually effect change so we could probably do better and one of the things that you’ve said is that the impact of artificial intelligence will be more profound than the internet so are there any particular aspects of you know the way things are going in technology that particularly excite you?
Guy Grainger
Yeah definitely I think it will take longer than we think so its easy for me to come out with these statements and think that everything is going to change in the next one or two years. I think it will take time One of the most interesting areas which is where we are adjusting our business model slightly for me is valuation because if you look at the way we valued properties in the past the availability of data has been reliant on local markets, it has been reliant on local people and interpretation and it has always been backward looking and it is still the case which is why we see values move upwards more quickly than downwards because you usually have transactional evidence that proves growth but sometimes in some markets where you’re seeing declines people stop the transactional evidence and hence values decline a bit more slowly, we’ve seen that in retail shopping centres for example. I think in the future the aggregation of data and the ability to forecast trends will lead to much more predictive valuation and the influence of how buildings are used in their current state will be taken into account rather than just looking at pure financial evidence. So over time I think the way that we value properties will become more transparent. That will make real estate more available to a much broader range of investors who currently do not understand our method of valuation. They think it’s a great art where there’s lots of interpretation required and we are going into a place actually which is very different from where we used to be. Where we used to be is that customers had to come to real estate advisors or real estate investors to find the data on property. Now that data is becoming more available, so investors and advisors have to provide a new value proposition and actually the same is the case when we value property. I think it will become more transparent, I think there is a real opportunity for technology and data aggregation to simplify the process of valuation and to make easier comparisons across different markets, whether that’s by sector or by geography, but it could take a while.
Susan Freeman
On the question of data I know we have been involved in discussions about data sharing in the real estate sector and there still seems to be some reluctance in some quarters to actually share data and feeling that there is some sort of IP attached to it are you seeing any movement there? Are people actually coming to terms with the fact that the data is out there, and they might as well share it?
Guy Grainger
I’m seeing movement in the UK definitely. I think there is IP in certain parts of data but there is certain aspects of data that quite frankly anyone should be able to access about buildings, the size of buildings, things like that which isn’t particularly precious. There is definitely IP in the transactional markets about under bidders, pricing and things like that which is good IP. I mean that’s valuable to know and I can understand people not sharing that but there are some data sets which quite frankly we need to let go of and make readily available and in that respect the UK is way behind some other markets. You know the French market was doing this fifteen years ago hence Co-Star actually don’t have much of a presence in France partly because the data is already available so its interesting to see how different markets have responded in different ways and the UK is on the case a little bit more now. In Germany there is a data aggregation website for commercial property which doesn’t exist in the UK, so each market has something different.
Susan Freeman
And what about the States?
Guy Grainger
So, the States actually is arguably a bit more old-fashioned in the way they organise and share data in real estate and actually Co-Star plays an incredibly sort of worthwhile function to aggregate all of that. So, we will see how that changes.
Susan Freeman
Sort of moving on slightly unusually for a real estate sector CEO you have attended the World Economic Forum in Davos. How seriously is real estate taken on the world stage because there couldn’t have been many real estate CEOs there?
Guy Grainger
No and its definitely an environment when you are sitting down with other CEOs where you still have to explain what it is you do because we haven’t been very good as an industry to articulate actually the proposition and I would say its got easier over the years because we’ve been going there for ten plus years so people have got used to our brand and our proposition. In terms of within the C suite but in the last eighteen months the real focus of attention on the built environment and the real estate footprint has been around climate change and the carbon, embedded carbon and the energy that is required in terms of the carbon impact of real estate and actually what I found interesting when I attend Davos last year is that that was a great entry point for me to start a conversation with CEO’s who quite frankly I previously would not have been relevant to but their drive to reduce carbon in their estate is now a burning priority.
Susan Freeman
I know that sustainability is an important area for you and there is obviously a huge responsibility in real estate because I think 40 to 50% of carbon emissions are from real estate and the built environment. Do you think we’re doing enough in this country to reduce these and how do we compare with other countries?
Guy Grainger
Well I think the UK in real estate terms is way behind a lot of northern Europe. When I travel to Germany, Netherlands, Nordics they are probably fifteen years ahead of us and I think there is an element of arrogance in the UK real estate industry that we are doing the right things but mostly it is for accreditation. It is not actually to drive a net zero environment and this is going to become much more of a priority if its not central to an investor or a developers’ strategy then the customer will notice because it doesn’t matter whether you’re selling to an individual with apartments or whether you’re selling to a business this is now a priority in terms of climate reaching a point of no return and I am frustrated with some of the conversations I am having. You know me Susan, I get personal about things like this and I think because we’ve got a big reach as JLL, because I’ve got international context of what I see in other nations and organisations I am trying to create a sense of urgency and greater ambition in the UK around this and it shouldn’t be a nice to have, it should be completely central to your business strategy.
Susan Freeman
Well that’s a clear message and you’re going to have an additional platform for getting this message out because you’ve joined the British Property Federation Presidential Team as Junior Vice President so that will give an opportunity hopefully to discuss some of these things and also I mean that ties in with the recent BPF Perception survey which reinforced the fact that the public don’t have a particularly high opinion of the real estate sector and don’t really understand what we do. I mean are we just, you know could we be doing better in terms of getting our stories out there because they’re such positive stories about what we do in real estate and the amazing communities that we create. I mean do you have any thoughts on that?
Guy Grainger
Yeah, I think we can be a lot better in getting the stories out there, but we can also be better at policing the bad stuff. The reason the perception of the real estate agency is so low is everyone thinks we are in it for ourselves. Now there is nothing wrong with capitalism, I’ve been in the capitalist world for many, many years but do it with a responsibility and I think that that will create a lot more value going forward both in terms of value of business but also in terms of engagement with society and I think we need to acknowledge where we are doing it well but also acknowledge where we’re doing it badly and some of the influence I am trying to have with the BPF is to call it out, as well as to shout when its good, is to call it out when its bad. I think also the BPF have a very important role in influencing government strategy and policy and I must admit that is a big reason why I am involved with BPF as well is to see how we as business leaders and representatives of real estate industry can engage with senior Politicians and Ministers involved with policy and you know I’ve had a lot of connection both through BPF and Business in the Community where I chair a taskforce on circa economy with Ministers on environmental policy and whilst some relatively ambitious targets have been set by getting to net zero by 2050 that will need a lot of regulation for us to achieve it and out of all of the manifestos of the parties in the recent election the Tories was the least ambitious. So, I really want to hold them to account and I think it’s not a priority at the moment for Government because of other issues. I think it will become a priority when they understand how much needs to be done in the first three years to achieve that target. The longer you leave it the more you have to do and I honestly think the real estate industry should be prepared for significantly more regulation to come their way around buildings and therefore having this as a central part of your strategy also manages risk for the future.
Susan Freeman
It is difficult we have a housing crisis that we have been talking about endlessly for you know, a number of years and have not seen to be able to actually do anything about. We’ve now got additional regulations you know coming down the road post-Grenfell. We’ve got these very real sustainability climate change concerns and it all makes it more difficult for developers to actually get their, you know, consents and build but it has to be done so the property industry has got a lot to contend with over the next few years.
Guy Grainger
Yeah it has and things aren’t perfect in this country particularly getting planning consents. It is hard, it takes a long time, it costs a lot of money. All of these things have to be built into the business model. I think engagement with local and national Government is really important to get through this. They also have a lot of influence over land so that is a very critical part of solving the housing crisis it is not as if any one person is at fault or one organisation is at fault. We have to come together and work collectively. But also we have to adapt our business models and our profit models to actually build these in and actually the real estate industry may have to accept that in the short-term the margins are going to get diluted slightly in order to create this long-term value generation and that’s something we find quite difficult to come to terms with.
Susan Freeman
And there are so many changes going on in the sector with all these challenges that in fact the sort of skills I imagine you’re looking at now when you’re recruiting you know for the future are very different from the skills you would have looked at you know five/ten years ago and JLL seem to be doing pretty well; they are ranked fourth in the top seventy-five employers in the Social Mobility Employer Index now I think that’s the highest ranking in real estate. What are you actually doing to encourage people from different backgrounds to come into a sector which is not regarded as the most forward going, traditionally its been regarded as a bit of a dinosaur. How are you getting bright young people in?
Guy Grainger
So, I would say this doesn’t happen by accident. You have to have a change in approach and a change in policy if you want to make this real and so I give all the credit to Chris Ireland and Claire England who is Head of Diversity and Inclusion in the UK. Chris has made it a personal passion of his which I wholeheartedly support and it’s a measure of the man himself, to make this a priority not just in terms of appealing to a broader set of diverse people but definitely trying to penetrate people from different backgrounds. But that’s not enough you also have to create an environment that’s very inclusive, very respectful because it can be a very sort of narrow set of people that work in the property industry and that’s a longer journey but it requires actually putting behaviour, a sense of community, a sense of belonging high up there on your business priorities. This isn’t the sort of language that we have talked about a lot in the past and it costs in the short-term. It is another one of these dilutive effects but in the long-term we think it will create real value and create places of work that are actually more enjoyable places to be. We’ve seen a huge sort of paternal and maternal instinct come out from our employees when we bring people into the organisation from disadvantaged backgrounds and whether they are apprenticeships or more senior and that’s good to see. People feel good about it and I think having that variety really helps. In terms of skill sets yes, we’ve definitely broadened it out, but you also have to upskill your existing staff. I think there’s a big responsibility to continue the learning process, whatever stage you are at in your career. There is a lot of focus on young people but hey you know why can’t we continue learning when we’re well into our fifties and sixties. We’re all going to live longer; we’ve all going to work longer so I think that learning process is actually part of the enjoyment of work so we’re trying to doing that. No one’s perfect but I think if you do change your approach that’s the only way it will happen.
Susan Freeman
And in terms of gender balance, I mean I know this has been an issue for you know many years with all the property services firms. Are you doing any better in terms of keeping women after they go off and have children, are they coming back or is it still an issue?
Guy Grainger
Well we’ve got better in terms of creating a much more flexible working environment because I think part-time work has been a real stigma that has been attached to women and it shouldn’t be so we’re encouraging more men to do part-time work and we’re trying to be more flexible for people who want to take career breaks whether that’s setting up a family or actually just taking some time off because its really important. That’s one step, it has to be multiple things. I think part of the challenge of our industry is creating roles that are attractive to women honestly. A lot of roles are not, and we have to be more creative in that and make sure that those roles enable senior positions where you can influence strategy and boards and again you have to be proactive about it. We’ve got a problem our industry. It’s not an attractive place to work for women in senior positions, it can be better. There are plenty of women that have succeeded so I don’t want to take it away from anyone but we need to be more flexible and we need to have roles that appeal to lots of different types of people and I think to be honest the industry is changing so much there is an opportunity to do that and you know real estate is not the only profession that has got this problem. Those Silicon Valley veterans I was talking to have got a much bigger problem in terms of it being a male dominated environment, they actually had a real bullying environment as well so we’re not alone, but other service industries have done better than us if you look at legal and to a certain extent some financial services. They’ve done better and they’ve done better because they’ve been pro-active for a sustained period of time and I think that we are seeing a response from the industry if I’m honest and I’m particularly pleased with the response from some of the service providers because we’re big organisations. We employ a lot of people you know in the UK we employ sort of in our real estate services business over two and a half thousand people and in our FM business and engineering business far more than that so as a big employer actually you can make a difference and we are trying to but its not just about the diversity its creating an inclusive environment and respectful environment and I am not sure we’ve talked enough about that because you can attract as many people as you want but if it’s a bullying male chauvinist environment, I mean they’re not going to stay.
Susan Freeman
So, it’s a work in progress. I think your role involves quite a lot of travelling so you spend half your time in London, half your time travelling. Assuming you do have some down time, how do you spend it?
Guy Grainger
You know I think because my schedule is so hectic during my work life I try and go the opposite way in down time and actually having a really boring weekend at home with friends and family is a really good way for me to relax. I mean obviously I like to keep pretty active as well I think that’s to manage the stress more than anything but in terms of down time for me you know the best thing is watching Gogglebox with my family. I mean for me that is proper down time, we can really have fun and connect as a family and of course holiday time is really special as well and I think the important thing in the very busy lives that we’ve got is the ability to switch off and this Christmas is a great time to do that and I will go up to sort of four or five days without even switching my phone on which people feel is completely shocking.
Susan Freeman
I’m amazed. What happens if somebody needs to contact you really urgently?
Guy Grainger
Well luckily I suppose I do have people around but at the same time there are ways to contact me, actually I say to people either text me or phone me if its really urgent because I might not totally switch the phone off but I wont look at any emails and if something urgent happens people get hold of me. I think the most important thing is to be present and if I’m looking at emails I’m not present with my family, with my friends and that’s a discipline that a lot of people, we need to be firmer on that because the ability to be present with friends and family brings a mindfulness that we all need as human beings and if we don’t then we get into a permanent state of mind of pressure and that won’t make us productive. So, I’m a great believer that down time should be down time because then when I return to a very intense working life, I will be more productive. That’s the plan anyway. You’ve got to have discipline around it right let’s see how it works out.
Susan Freeman
Yeah, well I think that’s a really useful life lesson and a good place to end so Guy thank you very much.
Guy Grainger
Thanks.
Susan Freeman
Well I really enjoyed hearing from Guy Grainger on his role at JLL and his take on the opportunities and the many challenges for the real estate sector. Clearly sustainability and climate change are going to be key focuses going forward. So that’s it for now. I really hope you enjoyed today’s conversation please join us for the next PropertyShe podcast interview coming very shortly.
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