Thursday 27th Oct 2016 - Logistics Manager

It was 20 years ago today. . .

It was more than 20 years ago that supply chain companies first started asking why they needed space suppliers. If they found their own site, surely they wanted a “space enabler”. It sounded cheaper.

“Will you be my project manager?” was the cry. Logistics operators in the 1980s and early 1990s begged developers to take on that role. Developers and agents scoffed.

Then came the slump and property professionals realised that in those conditions they could not go around flogging space as they had in the boom times. They announced that they were, after all, project managers. They still sold land but with a project management package attached to it, rather than a take-it-or-leave-it developer ultimatum: rent my space or go elsewhere.

The boom returned in the late nineties and early noughties. Many developers returned to the comfortable territory of simply offering space. But plenty have retained their PM department gloss. PM has a warm and cuddly ring to it. Don’t be fooled. The rewards are there. In 2006, Slough Estates International reported more than 2.5m euros of project management fees compared to 10m euros of new annual rents in continental Europe. Its project managers brought home a fifth of the cash it made from its continental operations that year.

With rewards like that on offer, there has been consolidation in the property PM industry. Property consultant King Sturge recently took over Legal & General’s property and technical services teams.

Jim Rowland, head of building surveying, architecture and project management at King Sturge reports: “The market for these services continues to polarise with further consolidation of the medium to large firms, leaving very few service providers in the middle ground.”

King Sturge project managers worked on the Ashtenne portfolio acquisition last year. They had to work to a tight timescale to carry out acquisition surveys on behalf of Ashtenne Property Holdings which wanted to buy nine industrial buildings, worth more than £22 million.

King Sturge is also expanding its PM teams abroad. Its Frankfurt team is supervising developments worth some 300m euros in Hamburg alone, including construction of the H&M Logistics centre in Hamburg-Allermoehe for the Carlyle Group. It is the lure of the major accounts that attract property consultancies to project management. After a beauty parade, pharmaceuticals company GlaxoSmithKline selected Jones Lang LaSalle and Cushman & Wakefield as its global real estate service providers, providing PM services.

There is a lot of wrapping and unwrapping of PM services with other consultancy within these deals. As a relatively new discipline, there are differences between firms over exactly what PM is.

Warehouse property consultant is clear that flexibility is the key to PM success. Run by Laurie Sice, its PM team’s involvement in a warehouse build project depends on the procurement routes selected to acquire the land and to manage construction. can provide advice and guidance on the relative merits of freeholder or developer-led sale, leaseback or debt financed, design and build and alternative procurement routes.

Principle activities include site search and identification, analysis of sites against criteria set and review of financial and funding requirements. It will then go into what is more of an agency role and negotiate freehold/leasehold terms and structure development finance for a client. Finally, it will develop a detailed building design and select, appoint and manage sub-contractors and other suppliers, providing management, monitoring and supervision of the construction process. The aim, of course, is project completion and delivery to schedule, on budget and to the agreed specification.

King Sturge’s 42 project management staff in London, Bristol and Birmingham provide advice including project strategy and planning, project set up, risk management and control.

It will select a design team and provide a procurement strategy, manage the design and tender, the construction process and the ever-important agency end.

At CBRE, the PM team under Nick Lambert, has pared down the job even further. It focuses on workplace and work style analysis, architecture, interior design and space planning, building surveying, due diligence and dilapidations, cost consultancy, construct administration, and health and safety consultancy.

Size of team is an important selling point to many of the major property firms and the race is on to be the biggest. In a bid to become the European leader, BNP Paribas Real Estate recently created a monster of a pan-European property management team, with more than 630 employees in 33 offices across Europe and 22 million-plus sq m of corporate property under management.