KLM managing director Howard Morgan welcomed the expert panel, and began by asking: "Is property management more important in mixed-use projects than in single-use schemes?"
"You have to be more focused," responded Land Securities' Yvonne Wells. "Initially we found it a huge challenge to make sure the retailers got what they wanted and the residential occupiers did the same. If you do get it wrong it's a steep hill to climb to win back the confidence of the occupiers."
"For me the key is how the uses work together," said Guildhouse's David Hudson. "I'm very concerned that you can blight the residential by putting it in a ghetto in the middle of a shopping centre - after all, nobody wants 100 flats that they can't sell or let. You have to get the movement right through the scheme and when it works residential can make a contribution to a centre by bringing it to life at night."
"It's a fast-moving area and we're still learning," said architect Matt Yeoman. "We're privatising cities in a way that's not been done before - Exeter's a good example. The public realm is the bit that signifies whether or not a scheme's being well managed but the dilemma is how much do we want to create gated communities?"
"I think there's a real question mark over who actually looks after the public realm," added Argent's Robert Evans. "Liverpool One is a classic example. How do you pay for a quality environment?"
"It depends on the client's horizon," interjected Capital & Counties' Alex Kabalin. "Short-term investors certainly won't do that. You can only get quality if the developer has built it for the long term."
"I think there's a danger that the public realm is maintained out of the commercial service charge in a mixed-use scheme," said DTZ's Paul Smith. "The residential occupiers really should pay their share."
"But when the public realm is maintained by the local authority out of the rates it can affect the feeling of quality," said Hudson. "On the other hand if it goes through the service charge the occupiers effectively pay for it twice. What we've tried to do is to have an estate charge apportioned on a pro-rata basis by floorspace, and then each individual building is also calculated separately."
"It depends how fair you want to be," said Smith. "The service charge code says it must be 'fair and reasonable'."
"And it gets hugely complicated if you have social housing," added Hudson. "Registered Social Landlords don't want to be saddled with a huge service charge."
"One of the biggest barriers to affordability is the service charge," agreed Evans. "You often have to fudge it and the developers end up paying."
"So how much support do you require from local authorities?" asked Morgan.
"When you're effectively building a town centre the local authority has to be involved to make sure that what you're building meets their aspirations," said Wells. "Our new scheme in Corby is a good example. It is actually the town centre and therefore it affects how Corby feels about itself."
St George's Imperial Wharf scheme, on the banks of the Thames in Fulham, was one of the first to integrate retail and leisure into a large residential scheme.
"There's an inherent conflict between the residential and a lively bar on the ground floor," said Stuart Luck, finance director at the developer.
"So what lessons have you learned from Imperial Wharf?" asked Morgan. "Planning further in advance and managing the managing agents much more closely," replied Luck.
DTZ has been closely involved in Morley and Thornfield's regeneration of Feltham town centre in West London. "Feltham's good but certain things are not quite right at the design level," said Smith. "Things like access, the conflict between refuse and deliveries and service yard management," he explained. "There's always going to be the potential for conflict when the supermarket's delivering at 3am, so it's a matter of putting the right occupiers alongside each other."
And Workman's James Taylor added: "We're advising on a scheme at the moment where there is leisure over the retail. Getting the management right on a scheme like that is crucial. We've already moved the residential well away from the noise, but there's still a balance to be struck."
And Nick Clare, head of project management at Davis Langdon, felt similar issues applied to mixed office and retail schemes. "Office occupiers are extremely interested in which retailers and bars are going to surround them, to the extent that they can almost determine the tenant mix."
"And the retailers who trade beneath large office complexes know that's why they want to be there," added Wells, whose portfolio includes schemes like Cardinal Place in London's Victoria, which uniquely won awards from both the BCSC and the British Council of Offices.
"We're also getting to the stage on some schemes where the retailers would be willing to contribute to a marketing budget, but the office occupiers don't want to know. We need rules on how you deal with that sort of thing," said Evans.
"Best practice is to create that sort of document on day one," said Morgan, "but how democratic should that process be? Or should it just be something the developer dictates?"
"A lot of our schemes are speculative, so who is there to consult?" pointed out Evans. "The danger is that your first pre-lettings tie you into one-off arrangements that restrict you further down the road."
"That's the advantage of getting the management in place from day one," said Wells, "to give the developers firm advice on what's a development cost and what's a service charge cost."
"Clearly, managing mixed-use requires special skills," said Morgan. "Does the industry have those skills?"
"Ten years ago we had facilities managers managing properties," said Wells. "Now we're looking for fully-fledged general business managers. For example, we want shopping centre managers who can become part of their communities - some now come from a retail background and some from marketing.
"But at Land Securities we're looking at the whole way we deliver service. For instance, in our Scottish centres we're introducing innovative glass pods where retailers can display items of stock that perhaps haven't been moving as fast as they would have ideally liked. Clearly, if we can help retailers to shift any stubborn stock it makes good commercial sense for everyone."
Dramatis Personae
Nick Clare, partner, Davis Langdon
Robert Evans, executive director, Argent
David Hudson, managing director, Guildhouse
Alex Kabalin, asset manager, CapCo Covent Garden
Stuart Luck, finance director, St George
Howard Morgan, managing director, Kingsley Lipsey Morgan
Paul Smith, director of shopping centre management, DTZ
James Taylor, director, Workman Retail
Yvonne Wells, director of property management, Land Securities
Matt Yeoman, director, Buckley Gray Yeoman
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