EDITOR’S COMMENT: Diagnosing the cause of the sizeable gender pay gaps in real estate isn’t difficult. Curing the malaise will be much harder.
This week’s deadline for larger businesses to lodge data with the government revealed few surprises for this sector. A lack of women in senior roles across the industry means most of the major players are well above the national mean gender pay gap of 14.1%.
Sure, there are eye-catching figures (all viewable online here). Pay gaps range from 54% at LSH to 17.4% at CBRE. The only sub-sector performing above average is housing associations. But the filing of these reports is only the beginning. And employers shouldn’t be judged most on where they are today, but on where they are next year. And the years after that.
Many chief executives said this week that their entry programmes were now much more evenly balanced. That’s commendable but meaningless unless they can create working environments that foster balance as those people advance their careers.
So where to start putting it right? In real estate, many aspects of reward and recognition are discretionary. Ensuring rigour must be a priority. Focus on unconscious bias. Require managers with discretion over pay and reward to justify decisions to HR. Go further. Look at what the best employers do. Check policies. Design every job to be flexible from day one.
The Government Equalities Office suggests zoning in. Which grade or level has the biggest gender pay – and bonus – gap? What is the composition of boards and executive committees? Then treat it like any other business challenge, with a plan and commitment to put it right.
McKinsey estimates a better balanced workforce could add £150bn to UK GDP by 2025. Diverse, inclusive businesses offer a wider variety of skills, more creativity, innovation and rounded decision-making, and higher staff satisfaction. It’s both a differentiator and a “sell” to clients. And it needs addressing.
■ REIT chief executives have been shaking their heads in the past couple of years at their share price performance. Falls of up to 25% or so since “that” referendum have been the norm. Only circling predators have delivered material uplifts in share prices. That’s been the case with Hammerson.
A share price of 581.50p on 6 May 2016 became 437.10p on 16 March 2018, a fall of 24.8%. After an approach from Klépierre last month of 615p per share, it stood at 542.80p at the time of writing – a recovery of 24.2%. But put aside Klépierre and the market is saying Hammerson’s assets are worth around 30% less than their book value.
This week, however, Cushman & Wakefield said its £10.6bn portfolio value had risen by 0.3% since December.
Something is out of whack. Hammerson talked of a “consumer flight to quality”, a view supported by some analysts. The market takes a different view. It’s down on London offices too – Derwent London shares trade at a discount of 16% – but listed players in that sector have proved the market “wrong” by selling assets at above their book valuation, whereas the shopping centre investment market is near dormant.
Intu trades at a whopping 42% discount, despite an approach from Hammerson, which suggests the market thinks the valuations are not sustainable and that there is material doubt that a deal will happen.
It would be a shock if Klépierre did not come up with a better offer by 16 April’s put-up-or-shut-up deadline.
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