Experience x Efficiency: The New Office Value Equation with Dan Higginson

In this insight-packed episode of Bricks & More, Adrian Strittmatter speaks with Dan Higginson – Director of Development and Leasing at Greycoat – to explore what makes an office truly valuable in 2025 and beyond.

Dan shares why the old rules of office development no longer apply – and how leading landlords are shifting from a cost-per-square-foot mindset to a hospitality-led, customer-first approach. It’s not just about desks and leases anymore. It’s about experience, identity, and long-term relevance.

Key talking points:

🏢 Why ‘Grade A’ is no longer a differentiator – and what matters more to tenants today

🔁 How retrofit is reshaping the commercial office market in London

🤝 Why service, experience, and tenant relationships are the new battlegrounds for value

🧠 How to design buildings that reflect how people actually work – not just how they used to

If you’re developing, leasing, or investing in commercial real estate, this episode is a must-listen for rethinking how value is created – and who it’s created for.

Dan’s LinkedIn: https://www.linkedin.com/in/dan-higginson-45b5454b/

Greycoat: http://greycoat.com 

Adrian’s LinkedIn: https://www.linkedin.com/in/adrianstrittmatter 

Saentys: https://saentys.com/ 

Transcript

Adrian Strittmatter: 0:53

Welcome back to Bricks More. Today, we'll be zooming in on one of the asset classes that has really taken a massive battering over the last couple of years. From societal changes, technological advances, and a few monumental global events that have really challenged the status of the office, its pertinence, and of course its value. Having always been myself an ardent defender and a major fan of the office, The studio, the workshop, the showroom, and basically all presence based real estate assets. I'm keen to learn more on how to create office spaces that truly thrive in today's market. How do you transform an existing office building into a must have asset? So today I'm absolutely thrilled to be joined by Dan Higginson, a true expert in shaping London's office landscape. He has over 20 years of central London real estate experience with household names like CBRE and Hammerson. Now, as the Director of Development and Leasing at Greycoat, Dan works tirelessly to ensure that work led destinations he develops aren't just spaces, but destinations that truly attract top tier occupiers, make a positive impact on their environments, and of course, drive real value for their investors. So to share his experience and his secret formula for success, I'm thrilled to welcome Dan Higginson. Hi Dan, welcome to Bricks and More.

Dan Higginson: 2:17

thank you very much for having me,

Adrian Strittmatter: 2:18

It's an absolute joy to have you here. Um, I'll start off with a very sort of personal question, we met, I think, this is not going to, it's going to age us a little bit, about 20 years ago at a Tower 42 leasing and marketing meeting. you've seen the change in landscape, how have you seen it change, the real estate landscape within London and commercial property in central London?

Dan Higginson: 2:42

So I think it's, it's quite interesting that you, you chose Tower 42, actually, because it's a project that Greycoat have been involved with probably for nearly 30 years now. And when we first came in, sort of post NatWest, post the IRA bomb that, that saw them move out, Greycoat, and it's, this is the Royal We, because I wasn't Greycoat then, but really came up with this sort of hotel office type concept where it was quite highly immunitized, very hospitality led, probably one of the few receptions you could go to in London that wasn't a hotel, but at one time I think we had 15 different languages spoken by the reception staff, for example. Yeah, we had concierge, we had meeting rooms, we had fine dining, we had in house, catering that you could order, we had a coffee shop, we had all this stuff that actually, other buildings didn't have. And in, in some ways it feels like generally the market has moved in that direction. I think the days of, when you think about what does good look like, the days of the sort of BCO guide, it's got to be this big and this square and the distances of this. Whilst that stuff is still important and specification is ever evolving, I think it's more about creating places that kind of people want to be in. That sounds a little bit pretentious but, particularly post Covid, we all know Businesses have had a real struggle to get their staff back into the office, and I think the role that the office has to play in, encouraging staff to come together and collaborate and share ideas and all that kind of good stuff, is, is as important as it's ever been really, and so I think we've moved away from this traditional grade A definition to what I, what people sort of regard as best in class. And I think that's a lot more fluid, it allows for a bit of architectural interest or eccentricity or things that just, that go towards making a space a lot more interesting and particularly given the drive towards retrofits where you're always working with an existing building and compromising, that's, that feels like a good place to be really, and even, even the likes of the BCO are now. Turning themselves and say well actually what does grade A mean because is it the building that gets the highest rent? Is it, is it the building that meets these certain criteria and how do we actually help people to define what good looks like?

Adrian Strittmatter: 5:05

And then, I think one of the key points, which I think is really good in terms of maybe as a slight hook mentioning Tower 42 and the change of all the amenities and I think one of the key things that you guys at Greycoat did was to place a building manager who was, I think, Peter Merritt at the time, who is basically from a five star hotel background, so actually changing, as you were mentioning, the culture within the building. Exactly.

Dan Higginson: 5:31

That's, that's right. And I think, just referring to occupiers as customers, you know, rather than tenants, for example, and it was very, very customer led. And, we, we spent a lot of time in dialogue with the occupiers in that building. and actually I think that, I'd like to think that's something that Greycoats still does. We get very involved in the upfront negotiations when people are looking at coming to our buildings. And, you know, when we, when we're running them, we try and engage with them, equally. And I think what you tend to find is you sometimes go and meet some decision makers. And they grumble a bit about the service charge is quite high, which is always has been in that building or, the rent's a bit high or, they don't like the fact they have to change lifts, which was always a bit of a bony contention,

Adrian Strittmatter: 6:16

Oh yeah. You did have to

Dan Higginson: 6:16

particularly when you didn't have that many towers and people weren't used to doing it and stuff like that. And but actually, when he boils down to it. Their staff really loved being in there. Mm-hmm. the, the, the people that moaned most about the service charge would have the most people turn up with their kids to the Halloween pumpkin making thing. Right. It was always the way. And actually when, when they stood back from it, you could see that actually they, they wanted to be in the building. Their staff liked being in the building. Mm-hmm. and that was a, and that was a product of really, not putting the customer first'cause that sounds, you know, really pretentious, but just the way that. Real estate really is a human, it's a very, very human business. We think about it as bricks and mortar, but it's a very human business really.

Adrian Strittmatter: 6:56

In terms of, we've talked a lot about sort of change and moving from maybe the best building to the most desirable building, which is potentially more subjective. But what would you say some things don't change whatever the context whatever the the pressure that's been put on You know on the office recently what are the things that you feel every single time that you're and we'll talk about the retrofit and so on so forth that you will Add into the mix because you know it's a sure formula for success and that's always been the case.

Dan Higginson: 7:24

So I think there's a couple of questions in there. I think the thing that hasn't changed is that it's a people business, right? And so one of the things I learned quite early in my career I think is, particularly in negotiations is try and solve for what the other person is actually trying to achieve. Quite often, we have quite a rigid or traditional, however you want to describe it, adversarial landlord and tenant relationship. There's some very established ground rules in terms of what leases look like and all that kind of stuff. and quite often you'll be negotiating a point that really doesn't have anything to do with what the underlying ask is from the other side from, from the occupier and quite often if you can, if you could tap into what that is, the number of times that things become so much easier to solve because they're not actually worried about the thing that you're negotiating, what they're worried about is something over here that's slightly related to it. Um, so I think really getting under the skin of the human element is really important. I think, I think the other thing is that as a landlord or a developer, you have to remember you're not the end user. So, you have to sometimes put aside what you think the right outcome is and accept that, that isn't the same for everybody. And I, and I think when it comes to this whole massive debate around return to office and the future of office and all that, that, that, that becomes really, really important because it does, it does mean something different to, to different people.

Adrian Strittmatter: 8:48

And before sort of diving into the crux of that, the last couple of years have been challenging, for the whole sort of real estate ecosystem, especially in commercial property in central London and other European capitals. 2025, new year, new, new leaf, positive, up, down, wobbly, wobbly thumb in the middle. Cool.

Dan Higginson: 9:08

cautiously optimistic is a phrase that gets used a lot, and actually

Adrian Strittmatter: 9:13

Mm

Dan Higginson: 9:13

I kind of had to think about what I thought that really meant, and, I think for a lot of people it probably means, what they really mean is they quite like to have their cake and eat it. I think they quite like values to stay at a level where they feel confident about buying something, but there to be enough market activity that, it makes it easier to get investment committee approval for, for stuff, perhaps. You're right. We've come off a period where there was huge cost inflation. the, the, the cost of borrowing went up quite significantly and some projects were rendered non viable almost overnight. We're also in a period where I can't remember, you know, looking back over 2024, I can't really remember a period where the occupier market here, the leasing in London anyway, and I'm really talking about London here, was so dislocated from the investment market. The two almost didn't have any relation. And, there's a, there's, there is a, there is a, a balanced but, reasonably good story around the occupier market. It probably isn't reflected in the investment market in, in the same way that I don't, can't remember a time when asset A gets brought to the market and we've ever had less visibility on who might turn up to buy it and how much they're prepared to pay. and, and so actually, we've gone from a framework where we tend to look at very, a very small number of deals because we sort of work on a basis, we can figure out quite quickly what we think works for us to actually looking at a lot of deals because you really don't know how these things are going, how these things are going to land and I think It would be great to see a bit more liquidity generally because I think that's helpful for everybody

Adrian Strittmatter: 10:53

hmm.

Dan Higginson: 10:53

it will certainly make Buying larger assets a bit easier because you have a bit more evidence to turn to But as I say, there's still it still feels like you know in certain bits of the market Pricing is pretty pretty depressed. I think one of the things I I learnt over time is that Markets bob along the bottom for a lot longer than everybody expects them to. The late, great Roger Lister once said to me, When it, when it, when it comes back, you won't believe how quickly it comes back. And he was absolutely right. it, it goes, it sort of toddles along and then, once confidence comes back and sentiment returns, the recovery is always, is always much faster than, than you expect. And all of the things that you were worried about, people suddenly, you know,

Adrian Strittmatter: 11:40

Forget

Dan Higginson: 11:41

forget about. Yeah, a

Adrian Strittmatter: 11:42

I think, I think the, um, to obviously not to quote, Roger Lister, but I think a lot of other European capitals and cities are, I would say, scared of the London crash and jealous of the London bounce back

Dan Higginson: 11:55

Yeah,

Adrian Strittmatter: 11:57

and I think that, because it's true that the bobbling along at the bottom or a, a slow progression or a slow, a slow sort of fall. Is, is, is less of a sort of central London style, it feels.

Dan Higginson: 12:09

yeah, I think so. I mean traditionally London, I think was characterized a bit by boom and bust huge amounts of over building You know the GFC as we all know was triggered by huge amounts of very very cheap debt and people buying buildings that they actually never really intended to develop or do anything with. They were just going to sell it to someone else for a bit more, a bit later. and we all know what, what happened there, but I think it feels to me like we're in a, you know, in the occupier market anyway, a bit of more of a state of equilibrium. There, there aren't thousands of occupiers looking for anywhere near the large chunks of space that you saw in the sort of back end of the 90s or early 2000s with people acquiring a million square feet and all the rest of it But there is a pretty restrained supply of buildings too. So It kind of you know, it keeps the market in in some sort of balance. Rents have actually moved on properly probably for the first time um You know, in, in, in recent history, really, and so it just becomes a bit more, I think, about creating the right product that, you think you can, you can lease, you can build well, lease well, and, and create something that's very liquid.

Adrian Strittmatter: 13:23

So what would you say, your or Greycoat's formula is to sort of identify and act upon a sort of redevelopment opportunity? What are the things that you would look for to say, okay, we can definitely add value here? Yeah. For ourselves, for the environment, for the sort of, for the tenants, but also obviously for your investors as well. What are what? What is the kind of checklist or things that you'd be looking at to add that value? Mm-hmm.

Dan Higginson: 13:52

That's a pretty broad question. I think, notwithstanding projects like Tower 42 and some others where we act as longer term asset managers...

Adrian Strittmatter: 14:03

hmm.

Dan Higginson: 14:04

Our general playbook if you like is buy a building, fix it, lease it, try and create something that's highly liquid and, and so I guess what we're trying to do is is is establish can we create the right amount of value within certain parameters of cost, time, third party risk planning and all that kind of stuff. So the decision for us is often not do we develop or do we not develop, it's do we, do we buy the building in, in the first place? And that can mean lots of different things if you're buying, last year We bought a number of assets that I think the market would view as more core plus. So Generally, they're they're well located freehold assets a bit smaller than our typical lot size they've maybe got a floor or two floors vacant, but they're at really compelling pricing and we feel we can come in, do some relatively light touch works, you know, improve reception areas, certainly bring it up to a minimum standard in terms of environmental performance and in those assets, we're really talking about getting it to an EPCB or, or better, leasing out the remainders of the space, moving the rents on a little bit, and then at the right time, probably, maybe look to exit, then maybe they sit in a portfolio that, that we manage, but the requirements of those buildings are quite different to a, a Finsbury Dials, whereby you're, you're buying a building that's essentially at the end of its economic life, you're repositioning it, we used to call it refurbishment, but it's has to be called retrofit now. and that, and, and genuinely from, from Greycoat's point of view, that that would be the most ambitious project we've ever undertaken from a sustainability point of view.

Adrian Strittmatter: 15:45

Mm hmm.

Dan Higginson: 15:46

Genuinely looking at circular economy, going through the whole building, top to bottom with the team. What, what can we keep, what can we reuse here? What can we reuse elsewhere? what, what do we have to, send into recycling, which is actually a really, really tiny fraction of it. And at the same time create the, the best performing building from an energy, occupational, operational energy perspective. so the two, the needs of those, those two buildings are very different. And I think, I think that's the crux of it really. What, what are you starting with and where are you trying to get to? Are you trying to look at protecting a bit of downside? or are you talking about creating real value? Have you got a building that's okay, just needs a bit of improvement or Something that needs a wholesale kind of reinventing really.

Adrian Strittmatter: 16:30

so different levels of works required, but also different levels of repositioning required. What would you say are the main challenges in today's again, focusing on central London office market. The main challenges around repositioning the office to the occupiers. Um,

Dan Higginson: 16:49

talking about retrofit Specifically, I think does come with a certain quite individual set of challenges that you probably don't encounter if you're building from the ground up I always think that when it comes to retrofit or refurbishment, the key challenge is where do you stop because there does come a point where you're, you can, the law of diminishing returns can kick in quite quickly if you're not careful and actually you're spending an amount of money that, frankly, You, you'd almost be better off knocking the building down and starting again. But in a market where quite quite rightly, the bar for demolition is getting higher and higher, that that's not an option available to you. So, understanding how you can compromise and how you can work with the building to, to try and create something that's interesting and, and does perform in, in the, in the right way. I don't think there's ever, there's any single silver bullet, if you like, but all, all, all major refurb projects are a bit of a journey. you start unpicking that thing and it is never quite what the drawings showed you. It's never quite what you think. Steel connections aren't where you thought they were going to be or they're not quite as good as you thought. Um, great example at Finsbury Dials, we wanted to keep all of the dry lining in the risers. This is a really boring thing, but you know, We wanted to keep all of that and actually once you've got to it you realize that either it might not have been installed very well to start with, maybe over the last, you know, 35 years of that building's use it's been damaged by, different fit outs or tenants or contractors or whatever. And you have to make the call, actually. We just need to condemn it. We can't fix, we can't fix this. The only safe way to deal with this, particularly as it goes to, to fire safety, is we're going to rip it out and start again. And that was not in the, that was not in the cost plan. That was not in the carbon plan. That was not in the program to do any of that. And so you need to work with a team that can be quite adaptable and Help you figure out a solution to that pretty quickly and when you're faced with a tough decision like that You just have to get on and come up with the right answer because you know The the project is still probably moving at a pace at the same time.

Adrian Strittmatter: 19:13

That's a really interesting point, because I think there's, there's, there's all the unpicking and refurbishment, retrofitting of, of, of these buildings.

Dan Higginson: 19:24

Hmm.

Adrian Strittmatter: 19:24

Are those points, when you were talking about, and rightly so, developing buildings that people want to be

Dan Higginson: 19:30

Hmm

Adrian Strittmatter: 19:31

is there a risk about people Doing things which sound good but don't really add value and forget what are the fundamental things which are going to make that building work and work for occupiers.

Dan Higginson: 19:43

I think that's a really nuanced question and it depends how you define value right because I think if you're about creating pure value then probably adding floor space to your building is the Within reason is the, is the way you're going to do it, but it probably only makes sense if you can generate a certain quantum Because the logistics and time, we looked at it at Dials for example Adding a floor didn't make any sense, adding two floors broke even, adding three floors Now you're starting to make money because you need the same, same scaffolding package and logistics to do three is to do But then it flips you into, okay, there's a lot more planning risk now, there's a lot more time, do we have to strengthen the existing structure, things like that. But I think there's a lot of things that, You can do that don't always need to cost you a lot of money But they might be the thing that really draws people to that building. I remember going around 200 Aldersgate Street When that was that building was first completed what well the when the refurbishment was first completed 12 years ago or something It was the first building in London that had really done end of trip properly. Bike store, showers and people were blown away by it, and it was all anyone talked about for a bit, Have you been to this building? You've got to go and see this, this, this, this. Of course now, if you didn't do that, people would think you were completely barking mad. and there's always a little bit of Emperor's New Clothes wrapped up in this stuff and, At one time it's, you've got to have a terrace and now is it, have you got to have an auditorium and all that kind of stuff. But I think, I think there are some really small things that you can do that really ignite people's interest and be the thing that people, that really draws people to a building.

Adrian Strittmatter: 21:33

Have you ever during the development process, and I know we were talking about talking to tenants and talking to customers, have you sometimes had a building where you've created a kind of brainstorming panel with potential tenants and they've fed into the the development ideas or have proposed things or you've heard things from tenants where you then I'll actually that would work really well on this building or this development or redevelopment.

Dan Higginson: 21:56

Yes, and no, I think is the answer to that because I think we And perhaps there's a lesson here I think as a market people are very drawn by the last thing they saw and what you know And their definition of what good looks like probably a term I'll use too much in this podcast, but it's quite driven by The last cool thing they saw or, or, or great solution. So, sometimes it can be really difficult to get the market to look forward. But if you go around a building that an occupier has done, An owner occupier. They make far braver choices about stuff than developers do. And I think part of that is because they know who the end user is. And they know how their business works. The downside of being a developer or a landlord is, probably at the beginning, don't know who your end user is going to be. And so, you don't want to do something that's so safe that, that you'll rule, you know, That no one could fall in love with and you don't want to do something that's too wacky that people don't understand it So you end up playing for this slightly odd Middle ground and I think as part of that and one thing that I'd really like to change going forward is Every design becomes quite rigid We're, we're almost assuming that we're trying to design perfection for a certain point in time and that that thing's going to stay like that forever. when I went to, Rapha's HQ, the guys who make all the cycling apparel, they, they gave me a tour of their building. They changed their reception area like four times. They've been in the building 18 months because they, they created it out of stuff they could pick up and move. And I'm not saying it's 100% appropriate for, a lot of grade A central London buildings, but, when they figured out that actually their staff like to go that way and not that way and when they do the town halls they're better off over there and not over there, they just changed it. And I think as, as a landlord community, we're, we're, we're not very good at, at doing that.

Adrian Strittmatter: 24:02

So do you think then, there's this thing that we've been and I think we discussed it as well before the, this kind of changing of perception of the role of the landlord from a simple landlord who's there to, obviously he gets the building developed, collect the rent, then he becomes a bit more active but doesn't really know how, and then there's this new mention of kind of the owner operator, and, and is that sort of helpful or confusing for landlords in the sense of, you are there to develop or to own a canvas onto which different tenants can express themselves.

Dan Higginson: 24:36

And, and, and within their own space, that is actually what tenants do. I mean, I guess in some ways, the, the better end of the coworking flex market has, has filled that, that space a bit. when we, we recently did, a building, which has been an unusual project for us, cause we came in quite late in the process, at Paternoster square, which we worked, we worked with Mitsui on and. For that project, we partnered, really, with Convene. and I say partner because we really, we tried to take a fresh look at how that building would operate. And I'm, I am quite clear that very often landlords and, they spend a lot of time creating amenity spaces in buildings. What they really mean is they've done quite a large reception and put some extra furniture in it, in a cafe that no one wants to sit in because it feels really awkward. And then they, and they're not very, so they're not very good at curating it and they're not very good at Running it. So, I was quite keen that we brought someone in who had that front of house hospitality, the tower 42 mentality. And actually one of the floors in that building in particular worked very well for convene. And we came up with a structure whereby actually we sort of handed over the front of house and amenity space. To them to sort of own and run.

Adrian Strittmatter: 25:58

Was it white labeled or did they,

Dan Higginson: 26:00

I mean it technically no because there's a little Convene sign about

Adrian Strittmatter: 26:04

but

Dan Higginson: 26:04

big but you but realistically it is

Adrian Strittmatter: 26:06

Okay.

Dan Higginson: 26:08

you know, and I think They were, they were really open to the ideas that we had and quite open, and I hope this is the case, and it's sort of obeying some of the rules that you just have to have when you're running a multi tenanted building. but they did, they were able to bring a, a different level of, they did things that as a landlord you, again, you just, you just wouldn't,

Adrian Strittmatter: 26:30

Yeah, we didn't know or don't know that those are the things that work. Yeah.

Dan Higginson: 26:34

So, and so I think, I think it really depends. There are some landlords, London as being an obvious example, who are really good at this stuff. They are far braver. I think they are generally, and someone will pick me up on this I'm sure, but generally I think they're seen as longer term holders of buildings. So they can take a view, because they'll probably be the owner in five or ten years time, they're unlikely to trade buildings in the way that other landlords would. So they're, so they can run a building in their own way a little bit, I think. They don't have to replace all of the kit if they don't want to, because they can stand behind the performance of it in the future. They can,

Adrian Strittmatter: 27:14

Well do it as you do sometimes with your own houses do it

Dan Higginson: 27:17

Correct.

Adrian Strittmatter: 27:18

a period of time you're occupying it you yeah Yeah, and you mentioned convener there any other sort of to really to be able to as you said activate and operate the building Are there the only good? Partnerships or partners that you've worked with in the past you've really managed to to captivate or capture that essence and roll it out?

Dan Higginson: 27:36

I think they're the, they're the best example that I can think of that, that, that Graycoat has done. But, I think, I think we will move towards a bit more of this, in generally in the future where, where cede control over certain areas of your building and amenity spaces. to, to specialist operators, to 60 London Mall, which has the fora in, in, in some of those lower floors, that's essentially what they're doing in that building for, for LaSalle. You walk in there and it has a different feel to, to a traditionally landlord run building. So I think we will see more of it. And I think probably there'll be the emergence of people in the middle who are not the landlord, but they're not a flex provider, but they're there to fill that gap of, of that sort of hospitality led management, if you like.

Adrian Strittmatter: 28:31

And in terms of retrofit, just thinking in terms of the opportunities that you can spot in a building, have you broken down the building, which might have been pure office before, into something more fluid where there's been some, you know, from a full office into resi, office and then something else on the ground. Has that happened? Or do you see that happening now, through retrofit, repurposing and, and breaking down the building into different asset classes, into more mixed use?

Dan Higginson: 29:02

We own, we own one building in, in the West End at Stirling Square, which has that. It's got six floors of offices, and then it's got two floors of residential on top.

Adrian Strittmatter: 29:14

That's true, it does, yeah.

Dan Higginson: 29:16

We, we didn't develop that. We inherited that, that scenario. I think that situation has been made more tricky by things like the Building Safety Act, where just putting residential on top of buildings, has become, not more difficult, more, perhaps quite rightly in some cases, there are more, hurdles to get over to, to do that. Does add a different dynamic to your, to the way you manage buildings, I think. also, I don't think the UK market is that used to it. If you go to Hong Kong, you have the concept of, strata titles and, and, and the like, and you're much more likely to find a shopping center that's got an office on the top of it with some resi at the top and a hotel and a bit of it. And in that genuine sort of mixed use, I just don't think the UK market is particularly evolved in, in that area, really. almost as an aside, I think we, Greycoat, we take the view that we stick to our knitting. So we do, we've got two bits of our business, central London offices and strategic land and kind of that's it. Every now and again we flirt with the idea that, well, there's an office building in Birmingham that looks a bit cheap and, maybe we could look at some stuff over here or whatever. And actually there's a group of people in the room that've got 25 years of experience, you know, each in doing a certain thing. And it just feels like you're going to. A really easy way to lose money is to try and do something that, you know, or move into a market which is not your own. Markets are incredibly nuanced and London is a very, it's a, it's a very transparent market. People know us, we know who everybody else is and it feels like, if you're the, if you're the bloke heading up from London on the train to buy a, buy a building and then some, they'll see you coming, right? And yeah, it doesn't sound like a really great place to

Adrian Strittmatter: 31:09

So, so that really, I think something also that you mentioned, and I, I think is often forgotten through, new initiatives, new legislature, new requirements is, and you've mentioned it with your team, is sometimes people, landlords, developers forget to do the basic things really well. We all do sometimes, in our professional and personal lives. But what would you say, if you were to say, to list a couple, what are the things that sometimes you've gone, wow, this looks amazing, but then there's this really obvious thing that's not being done. Like the basics of these five fundamentals that Every office building needs to have to ensure quality.

Dan Higginson: 31:50

so, No, no. and I think they'd be different in every scenario anyway. But I think,

Adrian Strittmatter: 31:57

know,

Dan Higginson: 31:58

in a, in a slightly different way. So, for every occupier that is happy to pay the best, the top rent to get the best building with the best view and the terraces and the amenity space, there's a massive chunk of the market that just wants to be in a good building in a location that is, that works well for their staff, that's got a good amenity on the doorstep, and that is well run. And they want to pay a rent, they're happy to pay a rent to get the right level of quality. You know, in city context, they want to pay 65 quid, they don't want to pay 100 or 120 quid. That is a massive part of the market. And we get really caught up in the sort of best in class, grade A

Adrian Strittmatter: 32:40

Flight to

Dan Higginson: 32:40

fight to quality. Because a lot of the time, that is what we're trying to deliver. But I think you have to remember, that's not most of the market, actually. and, I'm going to hang myself out to dry if I'm not careful. Because someone will pick up the phone to you and say, I was in a great building, and it was terrible, and blah, blah, blah. Anyway, um,

Adrian Strittmatter: 32:56

won't answer.

Dan Higginson: 32:56

but it's been quite interesting, some of these smaller assets, you go around and they're working really hard to deliver some sort of fully serviced, fully fitted thing, which, with no disrespect, they're not very good at. And you're like, well, why don't you fix the lift first? Right? Why don't you make sure that the thing that the tenants have been complaining about not working for eight months is working because that's the thing that will. Really

Adrian Strittmatter: 33:27

The upkeep,

Dan Higginson: 33:28

actually and if you started doing that properly, you know that that is to your point you know doing the basics, right? I suppose we we went around a building recently and and We went to meet meet some of the tenants just after we bought it and they said sorry Where are you from? And we said we're we're from the landlord Really? And no one's ever been to see

Adrian Strittmatter: 33:53

That's a landlord?

Dan Higginson: 33:54

Yeah, the landlord, and we're like, they'd met the building manager and people like that, but the landlord had never been to see them. And just from that one trip, we'd learned that, this tenant would quite like a bit more space. These guys actually would quite like to downsize and actually, this location, this building doesn't really work for them anymore. They want to move on. And all of a sudden, to me, that is what asset management is about, right? You've got yourself a bit of a plan now. Cause okay, well, we can help these guys downsize or relocate and we can, these guys can grow and it's really simple, it's not sexy stuff. It's not, it's not a building, 50 floors with a viewing gallery at the top of it, but it is the nuts and bolts really of how, how the market works.

Adrian Strittmatter: 34:36

Do you think people get lazy because of the length of leases? Like, just, oh, you've signed up. I mean, there's very few industries, if you were to think that, tomorrow you sign a contract with Sainsbury's to say, I will shop with you for the next 10 years, guaranteed at this level of shop every week. It doesn't really force you to, you

Dan Higginson: 34:51

I think, I think, honestly, I think there's a, there's a variety of things. I think, I think it's, I think there's a bit of that, why make, why make the effort? They're going to, they've got to pay, the lease structure we have makes it very difficult for tenants not to pay the rent really. I think there's an element where people get spread too thin, you, we're, we're a relatively senior team dealing with relatively large assets. when I look at, if you, if you bundled up the value of all of the assets that we deal with, you might go somewhere else and say, and find that they're dealing with the same value of assets, but there's 80 assets and every portfolio manager or asset managers got, you know, a number, you know, he's, they, you

Adrian Strittmatter: 35:36

across too many

Dan Higginson: 35:37

correct. And you talk to people that they've never visited some of the buildings that they have, that they're looking after. I just, to me, I can't get my head around that. We work in a market where we sort of joke, if you can't walk to it, we probably don't want to, like, it's not worth doing, right, kind of

Adrian Strittmatter: 35:55

Yeah, that's a

Dan Higginson: 35:55

And that, in central London, is a pretty small market geographically, even if, if by quantum of floor space it's big. So, but, there are, there are plenty of, I don't know whether they'd be described as portfolio managers, fund managers, asset managers, whatever. They're dealing with so many assets, and they're probably dealing with offices here, logistics over there, they've got a shopping center there, blah, blah, blah. They can't, they can't, they don't have the bandwidth to deal with it, and they say there's probably some of those assets they've never been to.

Adrian Strittmatter: 36:24

Well, they become cells on an Excel spreadsheet as opposed to

Dan Higginson: 36:27

Correct, and there's a call with the building manager or the property manager every so, every now and again.

Adrian Strittmatter: 36:34

in your view then there's still, otherwise you wouldn't be doing this, and me neither for that matter, but there's still value to be gained and had in the offices and in the office sector.

Dan Higginson: 36:46

Yeah, and to use the examples that I've just given, right, I think you can create value there by just doing a better job than the last person did, and going and talking to your tenants and understanding or customers, however you want to describe them, understanding what it is they want. because if they like the building, and they like the location, and you're looking after them, you'll probably find that they'll happily commit to stay for a bit longer, and they might pay you a bit more rent, and, you're just creating value that way, and I think there is a, there's a, there's a lot to be said for, for doing the small things well, and I think particularly when it comes to the sort of whole ESG thing, what's really Clear to us is that I think sometimes the market looks at ESG And I think they bundle lots of things into ESG and no one really quite knows exactly what they mean But most of the time they mean I think sustainability or environmental performance Actually, I think there's a bit of a perception not helped by the agenda in, in the, in the US, but I think there's a bit of a perception that this is some kind of like, fancy thing that is, is a bit of privilege. Yeah. Or, or, you know, it's, it's, um, it's kind of ended up somehow in the sort of woke, this sheep in woke debate. Right. So, whereas in actual fact, you don't, doesn't need to cost you a lot of money and you don't need to do everything now. And if you walk into a lot of buildings, there's, masses of low hanging fruit. Just go and look at how the building's being run. You can make really small adjustments. Make sure that floors aren't being heated and cooled when there's no one on them. You know, make sure that the bit of kit there isn't heating and the bit of kit there isn't cooling. if someone wants to flush the toilet at the weekend, it doesn't trigger all of the pumps in the entire, you know, the whole building, all that sort of stuff. And actually, you can make big changes to how a building performs just by running it a little bit better. there's a great stat that I saw that said when lockdown started, they tracked, how buildings, how much energy buildings were using. It took some buildings, took three months for some buildings or the managers of those buildings to figure out there was no one in them. So for three months, they were just carrying on as usual. Right. And they think if you can solve that, you know, there's. All the heat pumps in the world won't make any difference if you've got buildings that fundamentally aren't performing as they were originally designed. we've looked at buildings, we've looked at buying buildings that were originally developed as very low energy buildings, but you know, over time, the sort of people that knew how to run them left and something broke and no one quite knew how to fix it, so they pressed the override button. What have you and actually none of it's doing anything near like what it could be doing exactly so so I think there's a there's a we don't have to get carried away with, replacing and redeveloping stuff if you just, if we've just got better running what we've got.

Adrian Strittmatter: 39:57

Do you feel and this is more so potentially from a marketing perspective, but that there's enough work being done at the moment to really understand what tenant wants or who the consumers are? I mean, is proper audience segmentation and analysis being done in commercial property at the moment, as it's done in other asset classes like hospitality or, or things like that? Or

Dan Higginson: 40:26

I mean, the answer must be that no, there isn't enough done around that. Think it's probably a bit more difficult sometimes to figure out who your end user might be. back to the point I made earlier about, about the design side, but. But what I also think is that at a fundamental human level, the demands of a, someone working in a finance business might not be that different to someone working for a law firm or working for a, for a, for a tech business. But the demands that they might place on the building could be quite different, actually. I mean, what we try and do is. We spend quite a lot of time talking to, people like the interior design world, architects who are doing a lot of occupier based work and analysis, because they are, they're quite a good sort of canary in the coal miners to trends and things that they're seeing and what, what their occupier clients are asking them to put into buildings. So that's, that's quite helpful because you've got, you have to remember as well that actually for all but the larger occupiers, which to be fair, a lot of them, that is the bit of the market that we're dealing with. Real estate is a thing that where they have to make a decision pretty infrequently. Right. You're asking them to make it to your point about these commitments. It's a 5, 10 or 15 year decision that they make. They're not doing this stuff every

Adrian Strittmatter: 41:55

every day. Yeah.

Dan Higginson: 41:56

they don't, they're not, they're not really conversant in what, even what their options are. So they're quite reliant on others telling them what the art of the possible is. Don't get me wrong. There's definitely exceptions to that. we're, we're, we're liaising with people who, Looking after a portfolio of offices for their business in different jurisdictions and they'll something that worked brilliantly in Geneva, they'll bring here and something that works over here. They'll take, there. So there is a bit of that, but I'd say that is a by number of occupiers. That's, that's a minority, I think. and again, I think that's one of the slight quirks that we're seeing, just going back to the ESG thing. I think we're in a funny position at the moment where it's actually landlords often Telling occupiers what they think good looks like, we're seeing quite a lot of inbound, or a lot of a lot more structure coming from lending banks, investors, institutions, they're quite clear on what they think a building should be able to do. The level of understanding, appreciation, comprehension, whatever you want to call it within the occupier community, I'd say varies hugely from occupiers that are really interested, from those that say they are but they aren't really, and those that kind of don't really care. And so, and that goes for everything, all sorts of other, occupational trends as well. So, I think, I'm not quite sure where I'm going with the answer to this question on where we started, but I think, it feels to me like we're still in a time where the sort of, the role of the office is still evolving. People aren't, still aren't quite sure what it is. And

Adrian Strittmatter: 43:42

yeah,

Dan Higginson: 43:42

I think part of the debate that really frustrates me, and you only have to go on LinkedIn for five minutes and there's everybody saying it, is this very binary debate, right? It's like it's, whereas, no one's saying that, people should be in the office. All day, every day, and likewise, I don't think many people are saying that they want, they want to be at home all day. I think what, hopefully, what the world post COVID has taught us is that some people have been forced to try working from home and they really hate it. Others, it's an absolute, it's a lifestyle utopia. I mean, I'm sure if you, if you work in Southern California, you've got to sit in your car for two hours to get to work. I'm sure working from home is really attractive. If you've got two small children like I do, it's not. But what I think we, what I hope we have learned is that there's a greater, what the office needs to do has needs to evolve a little bit, that actually being in the office doesn't necessarily mean you need to have a desk and a chair, but frankly, I don't think we found a better solution yet for bringing people together to learn and collaborate and you can debate, what different roles need and you can debate what productivity actually looks like and all that kind of stuff. But I think, I'm not a turkey voting for Christmas, right? So it's very much in my interest to be an advocate of

Adrian Strittmatter: 45:02

but I mean, I think that what's interesting and what you're saying is that then you're just going back to at the end of the day, you're building environments and destinations and canvases for tenants and occupiers to be able to express themselves on and if they have a business, which is, more sort of more hybrid or more flexible or, their component and their requirement for offices is going to be different from what it might have been 15 years ago, but there's still a requirement there, whether it's, co working or managed space or, keep on full lease, but slightly smaller

Dan Higginson: 45:33

Exactly, or use the same amount of space, but in a different

Adrian Strittmatter: 45:36

a different way.

Dan Higginson: 45:36

and I think what's quite interesting is we've seen numerous examples where, businesses have used new real estate as a catalyst to drive some change, it might be that they need to bring three different offices together or mix people up or introduce a new way of working and actually, A change of scenery is a really good, a really good way of doing that, frankly. and you, and you do see that quite a lot, using the office as a vehicle to enact some form of sort of cultural change or, or what have you.

Adrian Strittmatter: 46:07

And then maybe as a, as a, as a final question then, to keep on that positive note around, the product that we're all involved in, which is real estate, more specifically the office. And you've got clients, obviously who, investors. Yeah. Is that investor appetite still there? Has it changed? Has it, evolved? Are they asking you to do different things with them to stay in the game of offices, if it were?

Dan Higginson: 46:27

look, I think London as a market and everything that I've said this afternoon really, really relates to London. I think we'll, we'll continue to be one of the preeminent office markets, in the world, as, as a destination and as a destination, not just for occupies to have be headquartered here or to have offices here, but for investors as well You know, I think the uk is still seen as a relatively safe haven for lots of reasons that we probably all understand So there's no lack of appetite I think from it from investors. I think the challenge we're having right now is There's very little transactional evidence for people to hang their hat on i'm sure that i'm sure that will come and so it does feel like I think at an investment committee, there are certain pockets of the investment world where offices is still a pretty dirty word. and, we've had numerous investors say to us, I love the idea, I think the asset's great, and there's no way I'm taking this to my investment committee, because they'll just, you know,

Adrian Strittmatter: 47:29

get shot

Dan Higginson: 47:29

I'll get shot down. This is career risk, at its finest. So, But, we tend to be dealing with pretty rational, grown up, institutional, whatever you want to call them, investors. And I think, what they need from their office investments has changed. Certainly, the, the, the list of requirements we get now from, we're working with Goldman Sachs on, on Finsbury Dials and, their sustainable development brief, their idea of what this building should be able to do is really, really quite ambitious. It's it's gonna be quite hard. We'll get there, but it's been a real challenge to hit some of the targets that

Adrian Strittmatter: 48:05

that they've set.

Dan Higginson: 48:06

that they set in terms of embodied carbon, operational energy, the circular economy. I think the real test for all of us will be when we come to sign up a tenant. which, hopefully will happen, at some point soon, to what extent can we take the tenant, the occupier, the customer on the, on that journey

Adrian Strittmatter: 48:26

that same

Dan Higginson: 48:26

and kind of, you know, live, live this thing that we've, we've, we've

Adrian Strittmatter: 48:30

well become an ambassador for the transformational process. You brought that building on

Dan Higginson: 48:35

Exactly, we're delivering the, the kind of fuel efficient car, are they, are they, they're the people that are going to drive it around. Exactly. So, so we don't see any, we don't see any lack of appetite, but I think, back to that sort of cautiously optimistic, investors remain cautious because it's very, it's very difficult to prove out. What values are today in it intuitively you you know over a long time you develop a real feel for what? What value is and what value should be but yeah? There's a point at which you have to actually be able to prove that to someone

Adrian Strittmatter: 49:12

is it to prove out but also to feel out the negative rhetoric that's been banded around for now You know nearly what nearly two years so it's hard to get over that as well Is it is it really safe to come out? No, is that that's the thing as well.

Dan Higginson: 49:27

Yeah, and and actually we you know sometimes. I'm still surprised by people that people read a headline from somewhere and they'll go yeah, but really are these occupiers taking that much space and sometimes These questions come from people that probably should make better frankly, but you'll say well

Adrian Strittmatter: 49:45

Read the

Dan Higginson: 49:46

look look at the evidence, right? Look at these people went from this amount of space to this amount of space it didn't really downsize they just If anything, there's some, there's some, anecdotally, and I'm not close to any of these deals, but there were some quite high profile deals that happened not long after sort of COVID. And I think the one consistent thing amongst those occupiers is none of them took enough space. Because they all thought that, working from home was going to be, a longer term thing. And actually the number of people they'd have in the office would be, it would be a lot lower. And actually now they realize that if they actually want to get people back into the office, they've got to have somewhere, somewhere for them to sit. Right. and I remember having this conversation with, the head of real estate at Goldman Sachs on the, on the occupier side and not on the investor side, I said to him, cards on the table, how, how are you treating this? He.

Adrian Strittmatter: 50:39

sit. Yeah.

Dan Higginson: 50:40

Downsizing said, well, if you put aside some of the roles that are moving that we're always going to move to different markets So what what have you he said we have to build the church for Easter Sunday, right? If everybody turns up we need some they have to have somewhere to sit How could

Adrian Strittmatter: 50:55

can't disappoint. No.

Dan Higginson: 50:56

and and and and I talked to mates of mine in the work in real estate? That say I went to I went to the office this morning, but I couldn't get I couldn't get here It's it so I had to go home You know, so I think

Adrian Strittmatter: 51:12

So, it's cautiously optimistic to be brave again.

Dan Higginson: 51:15

yeah, maybe. Yeah, maybe that's the right way of putting it. It's clunky, but it

Adrian Strittmatter: 51:19

the way to find a soundbite. Excellent. Hey, Dan. Thanks ever so much for this chat.

Dan Higginson: 51:25

No, thank you very

Adrian Strittmatter: 51:26

to have you on the, on the show, on the podcast. And, yeah, maybe we'll, we'll, we'll chat again on another, but maybe a TV show in another

Dan Higginson: 51:32

Oh, get me back in a year's time and see whether any of what I said is true. You can test

Adrian Strittmatter: 51:37

Yeah, I'll just write it, write it down. Dan, thanks ever so much for being

Dan Higginson: 51:40

Thank you. Cheers.