Kate Taylor explains the importance of developing your skills to enhance a client’s real estate portfolio
The strategic real estate consultancy competency is an optional competency commonly chosen by commercial property and valuation pathway candidates.
This competency is about the provision of strategic consultancy advice to clients on real estate issues influencing the business.
Understanding a strategy will need a good awareness of the big picture and everything that affects property, from demographics to damp. This will necessitate a forward-looking perspective to future-proof a strategy in terms of long-term trends such as sustainability and technology.
An organisation’s real estate portfolio ranks alongside personnel as its most valuable asset. This asset needs a focused long-term strategy to maximise income and capital growth, concentrating on strategic long-term goals relating to the performance of real estate as an asset. This is distinct from the operational and occupational objectives that drive a corporate real estate management plan.
It can be difficult to distinguish the corporate real estate management activities from strategic real estate consultancy; the surveyor’s role on the ground is very similar but the function of the activities is different. Strategic real estate has the strategy for real estate alone at its heart, with a financial or investment goal rather than an operational and occupational one.
This muddy area has led the RICS to suggest within the pathway guide that candidates do not declare both strategic real estate consultancy and corporate real estate management. It is not technically forbidden but it is a bad idea and both the candidate and assessors are likely to get bogged down.
Level 1
Level 1 competencies are all about the knowledge that underpins competence. In the context of strategic real estate, this will relate to an understanding of what a real estate strategy is, how it works and the key deliverables supporting the overall strategy.
This will include a good knowledge of business and finance to measure strategic success in terms of financial ratios such as return on capital and how to model returns against strategic goals.
We are, of course, talking about real estate as an asset and this will necessitate a good awareness of all the usual property competencies like valuation, property management and landlord and tenant, as well as the agency competencies. This is so the strategic real estate consultant can demonstrate an awareness of the options available in order to meet the all-important strategic goals.
Level 2
Level 2 is about putting that knowledge into practice and describing specific examples that show skills and demonstrate competence.
Candidates need to apply knowledge and understanding of the business context of real estate. I would expect candidates to be able to confidently describe a specific strategy and how they had contributed to achieving it.
This can include activities such as:
■ Portfolio strategy and evaluation
■ Benchmarking analysis of occupancy costs
■ Portfolio ownership/financial structuring
■ Site-specific relocation and rationalisation planning
■ Freehold vs leasehold analysis
■ Acquisition and disposal planning
■ Site-specific location selection
All of these activities need to be evidenced through describing the techniques used, for example discounted cash flow or traffic light analysis. Candidates may be working in a specific sector or across sectors and working at a property or portfolio level. The key will be that all competent candidates will ensure the objectives of the strategy drive their real estate activities at all times.
Level 3
Level 3 is always about complex reasoned advice. In the context of strategic real estate this can mean risk assessment and advice to clients following option analysis. The advice to clients in this area may well be in the form of a presentation or verbally at a meeting.
Advice to clients should include quantitative analysis to evidence the effects of various options and assess risk. Whenever various options are considered or there is uncertainty, sensitivity analysis will be a key tool in advising clients. A great example can be presenting data in the form of charts and diagrams to support recommendations.
The matters considered for advice at this level should reflect complex real estate structures such as lease hierarchies or sale and leaseback deals. Strategic real estate advice can also reflect simpler activities familiar to any surveyor such as acquisition and disposal or leasing and letting, set against the objectives of the strategy.
A worthy challenge
Strategic real estate consultancy can be a really interesting competency for the assessors and if done well the candidate can have a professional conversation rather than a grilling. This competency needs to be approached with a very strong understanding of the originating strategy and the candidate’s role in delivering the strategic objectives. Common sense, business awareness, an outward looking perspective and confidence are the keys to success.
SUPERVISOR AND COUNSELLOR TIPS
■ Remind candidates to take a step back and view the big picture rather than get bogged down in the detail of their individual tasks
■ Keep asking candidates “why?” so they get used to defending their options with analyses and evidence
EXAMPLE QUESTIONS
Level 1
■ What is in a real estate strategy?
■ What are the changes to EPC from 2018?
Level 2
■ Relate your efficiency analysis to a specific strategic goal. How did your activities contribute to the goal?
Level 3
■ Describe your advice to client on the disposal strategy. What led you to suggest this approach?
Kate Taylor FRICS is an APC chair and a DeLever APC coach. Follow Kate Taylor and Jon Lever on Twitter: @katetay73593006 and @deleverapc
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APCeye magazine Critical APC information in a free monthly magazine. www.mydelever.com
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APC presentation Online masterclass discussing key elements of the APC final assessment interview. Hints and tips on best practice. www.delever.com
Free timeline wallchart A2 pictorial view of the APC process, based on the RICS guides and Jon Lever’s professional knowledge. www.delever.com
Supervisor and counsellor APC training – formal CPD Tips on how to manage and support your candidates. www.delever.com
APC mock interviews Practice your APC final assessment interview, including your presentation and specific competency-based questioning. A full-hour interview just like the real thing and immediate feedback from the two assessors. www.delever.com
APC commercial property and residential revision guides Every forward-thinking APC candidate’s reference book for APC preparation. www.apctaylormade.co.uk
Free trial: myAPCDiary This resource can save up to 60% of a candidate’s day-to-day APC administration. www.apcdiary.com
RICS APC guides These should be read at least once every three to four months. Candidates from outside the UK also need to check their regional websites for any local APC requirements. www.rics.org
