I think we are sitting here at a point where we really need to take a massive mental leap forward, particularly in the property industry. Where we think of real estate really as not part of the climate solution, where we can deeply integrate the S of ESG in a way that’s coherent and not some sort of a bolt-on feature in what we’re doing.
Susan Freeman
Hi, I’m Susan Freeman, welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum where I get to interview the key influencers in the world of real estate and the built environment.
Today I am delighted to welcome Basil Demeroutis. Basil is Managing Partner of purpose driven, real estate investment firm, FORE Partnership. The firm has a portfolio of over one million square feet in the UK and Western Europe, spanning offices, mixed use and residential sectors. FORE’s holistic approach brings together environmental sustainability, social impact and an authentic appreciation of how people live, work and interact, turning these drivers of profitability for investors and tenants. Prior to founding FORE, Basil was a Partner at Capricorn Investment Group, the family office of Jeff Skoll, eBay Founder, overseeing global real estate and serving on the firm’s investment committee. Previously, he was Managing Partner at property fund Jargonnant Partners and spent the early part of his career in investment banking. As part of FORE’s commitment to driving solutions to carbon reduction and making positive social impact in the built environment, FORE became a B Corporation in 2020, one of the only investment management firms in the property sector and indeed the wider private equity community to be a B Corp. It has also made an industry leading pledge to make its business and buildings net zero carbon by 2025.
And now we are going to hear from Basil Demeroutis about real estate development with a purpose. Basil, welcome and great to see you today, where are you calling in from?
Basil Demeroutis
I’m actually in my office in Mayfair, here in London.
Susan Freeman
Okay. Okay. And I believe you are originally from Canada and you grew up in Toronto. How did you get into real estate and how did you get to London?
Basil Demeroutis
Yeah, I did grow in Canada but I’ve lived here in London for the last 22 years or so, so I do feel like it’s my adopted home and my kids speak with funny British accents so it probably means I am here to stay. So, how did I get into property? Well, I mean I think it really, like a lot of people in my position, it probably started at a fairly early stage and I’ve always been a tinkerer and as a young kid I was always taking things apart and trying to put them back together again and that’s from making go-karts, even taking apart the family television to try to figure out why it wasn’t working and eventually actually my first job was in construction, I had to actually lie about my age, I was only 15 at the time, and I ended up being a labourer on a construction site so they gave me a broom and told me to go and sweep over there in the corner and work my way across the building and so I had exposure to construction and real estate at an early age and so I guess I was exposed to it from a young person. Eventually, when I went to… decided to go to University, I was torn between being an architect or an engineer and I actually really desperately wanted to be an architect but I couldn’t draw to save my life and so I applied to engineering school and got into engineering, became an engineer. Eventually, after graduating I went to Wall Street and spent some time in investment banking, did about eight years in New York in asset financing and real estate finance and cut my teeth on Wall Street and then moved over here in 1998 to the UK with Bear Stearns, may it long rest in peace, venerable name, and then decided to leave banking in 2001/2002 and having seen over the years so many great property companies and property investors like Sol Kerzner and did financings for Planet Hollywood and others and I saw these amazing luminaries in the field first hand having raised capital for them and taking them public and I thought, you know, I could have a go at that too and then ultimately left banking to start life as a private equity real estate investor in the early 2000s.
Susan Freeman
Well, it sounds like a sort of pretty good way into real estate and when you started, you started your company I think in 2012. What was the vision because you obviously wanted to do things sort of slightly differently having seen, you know, so many aspects of real estate? What was your thinking when you set things up?
Basil Demeroutis
Yeah, I mean, I’ve always been kind of a problem solver and when I looked at the real estate industry, you know, I felt like there was something wrong with it, something broken about it and I had spent some time, as I say, as a GP running a property fund with two other partners focussed on Germany, then I went in house into a family office of one of the two EBay Founders where I had run his real estate investments but also got exposure to all of the amazing things he was doing with his capital on a philanthropic basis and I have always felt like again as an engineer with an engineering mindset that every problem has a solution, it’s very you know closed ended at the bottom of the page there is an answer within a box and I felt like the problem with the real estate industry was few fold. First of all, I think funds weren’t particularly aligned with investors’ values and what they believed in and they weren’t necessarily serving investors’ best interests from the financial standpoint but also, more importantly, from an investment strategy standpoint and when we looked across, and when I looked across the horizon and to see what was available out there for us to deploy our capital into, there really wasn’t anything at that time that was really, you know, tackling these problems around climate change, social impact and offering up a bigger, better, bolder vision of what the future of real estate could look like and so I set it up.
Susan Freeman
And the name, FORE, I think it stands for Family, Office, Real Estate? So what is the connection? Are your investors’ family offices?
Basil Demeroutis
Yeah, when we set it up, again I’ve set it up having been a partner in a family office and so the idea was that here we were investing along the values and the principles of family capital but I think over the years it’s conveniently also evolved into the future of real estate and as we’ve added more and more families to our portfolio of investors that we work for foundations, endowments and indeed now some institutional capital, we really realised that this a… these problems that we are trying to solve are universal problems that every investor faces, it’s not just private families and what we were really defining was what does the future of real estate look like?
Susan Freeman
That’s a very good question, we’ll answer that one a little bit later, I think. So, you’ve recently attained B Corporation accreditation which, you know, is at the moment still very unusual for a UK real estate company and I think to my mind, you know, a lot of what you have been doing since you set up the company has really, you know, involved providing social value, you know, environment is important so I think it would be useful for our listeners first of all to you know, talk about what B Corp accreditation is and, you know, why you think it’s important.
Basil Demeroutis
Yeah, so B Corp accreditation is a system that looks at your business holistically end-to-end so from our perspective as a real investor, it looks at our buildings and what our buildings do but also our business and what we do as a business and it looks at it really in a, as I say, quite a holistic way from an environmental sustainability standpoint, from social value, how you treat your staff and employees, how you procure things and it’s really I think the only standard out there that I know of that really takes both the social value piece and the environmental sustainability piece and the governance, the whole ESG equation and blends it into one, and I then I think what’s particularly interesting about it is that if as part of the process you put into your company charter and bylaws, a commitment to act on behalf of people and planet at the same level as profit, not above but certainly not below but in parallel and those three principles govern everything that you do. I think that’s the second thing that’s interesting about it is that there’s a sort of over arching governance that sits there behind the scenes and it’s not necessarily prescriptive, like you have to have a desk within seven metres from the window as you do with BREEAM or water stations every x metres as you might do as well but it’s an overarching set of principles that are supposed to govern how you conduct your business, every day, in every aspect and I think that’s what’s especially attractive about it is that it’s really deeply infused into the governance of the firm and indeed the DNA of the firm.
Susan Freeman
And was it a difficult process? How long did it take you?
Basil Demeroutis
It took about a year. As you said, I think we had been doing this for quite a while and when I was at Capricorn, the family office, I think we became a B Corp there in 2014 and we, through the school foundation, we were instrumental in, helping support B Labs, the company behind B Corp early days so I had been pretty familiar with the process for a while but even still, it does… even though you are doing these things, to kind of ingrain them in your… these processes in your daily life and document them and make sure that you are actually doing what you say you are doing anecdotally, it does take a little while and so it took us about a year ultimately.
Susan Freeman
And going through this process where, you know, you are looking in a very granular way at every aspect in your business, did you find out things that you didn’t know about your business? Did it help your understanding of what you were doing?
Basil Demeroutis
Oh, for sure. I mean, I think, we’re a small business, we’ve got a portfolio of about a million square feet of real estate, kind of a gross asset value of around 700 million so we’re kind of a, you know, large end of the small guys, small end of the medium firms and so we don’t have a lot of things, resources to sit and write policies and document everything that we are doing, we have you know great stories and we are doing things, you know, rigorously in a way that’s really, I think, profoundly changing the way we think about property but if you asked us twelve months ago like to pull out a piece of paper that showed what our procurement policy was or how we think about, you know, very granular things around HR, I mean we just, we didn’t have them and most certainly didn’t have them updated so we spent a lot of time I think institutionalising the things that we were already doing and making sure that they survived the test of time and that we can set the foundations for a bright future.
Susan Freeman
And, I mean, it seems to me one of the sort of more challenging things for a property company in going through the process, is that the supply chain and making sure that your suppliers are also, you know, following the same principles and values that you do, I mean, that must be quite difficult to do.
Basil Demeroutis
Yeah, it’s getting easier, I think it depends on where you look. Obviously within real estate we are touching huge volumes of things every day, from number of people to number of things that we are procuring, I mean you think of it even a relatively modest sized firm like ours, we are running 40, 50, 60 million pound projects, I mean these are the size of small companies so the procurement decisions that we make have an impact and they matter and where I think we really excel is looking deeply into those activities and really trying to understand where does our steel come from? If we make a decision to buy recycled content steel, does that mean it comes from overseas for example, as opposed to here in the UK and what does that mean for road miles or for jobs or social value that you might destroy in Scunthorpe versus the environmental benefit you get from recycled steel and I think these are the kinds of procurement decisions that as a property investor you really have to get into and I always liken it like, you know, being a chef and fine, we can all probably go to the grocery store and buy some ingredients and put together a meal that satisfies our hunger but I think the best chefs really understand where their ingredients come from, the difference between tomato A, tomato B, when the right type of year is to buy a particular type of produce. I don’t know how you could be in the kitchen of real estate without really understanding exactly where the ingredients come from and I think that’s really where we really try to excel.
Susan Freeman
I think that is a great analogy and I think it is something the property companies are going to have to be thinking a lot more about with…
Basil Demeroutis
It’s tricky, you know, where you’ve got big portfolios and, again, I think we are, you know, size is sometimes a disadvantage but sometimes it’s an advantage, you know, we’ve got about a dozen assets I’d say of a million square feet so, we could be pretty nimble and we will want to make a decision about procuring something in a particular way, we could decide around the table, takes us five minutes. If you are a large REIT that’s got public shareholders and large legacy portfolios and the decisions that you make may have implications, not only the asset you are involved with but more broadly you’ve got a complex decision tree. I think it’s complicated and, you know, I’m a big admirer of some of the people you’ve had on your show, I listened to Harry Handelsman’s interview with you recently and I mean these are real luminaries across the industry and I think they were active during a period of time where they could actually take decisions and I think universally they are all so into the details – Harry’s I thought was fascinating, you know, not only about the buildings but even, you know, his journey to work, he had it down to like the minute, you’d say he’d arrive on the platform thirty seconds before the train and, you know, he’d catch that train and it would be nine minutes, I mean details matter in real estate and I think when you can have that decision-making power vested in people who believe passionately about what they are doing and have the ability to make decisions that actually can maybe not necessarily seem economically the best ones within a large corporate environment sense but they make those decisions anyway because they are believers and then I think you can really foster change.
Susan Freeman
Interesting that you mention Harry Handelsman and the journey to work because I realised that he was the original fifteen minute city man at a time where we were all happily, you know, commuting, he was the one that was saying, you know, some thirty years ago, you know why don’t people live near where they are working but I think I mean the whole real estate sector is going to have to be thinking very carefully about sustainability because with real estate and built environment being responsible for some 40% of global carbon emissions, you know it’s not going to go away and there’s going to be an increasing focus on the sector so, I mean, just going back to B Corps, do you think you’ll be seeing many other property companies following this path and I think one of the big questions for them is, you know, will it add to the bottom line, you know, they may want to do the right thing but they also need to know that, you know, at the end of the day it’s going to be good for their business as well.
Basil Demeroutis
I think we’re at a critical juncture in history and I think everyone… we all probably it’s maybe slightly over-used perspective but I think this is really true and whether you think that some people call it the fourth industrial revolution or this moment in time, the build back better, the new normal, the next normal or the better normal, I think we’re sitting here at a point where we really need to take a massive mental leap forward, particularly in the property industry. Where we think of real estate really as not part of the climate problem but really is part of the climate solution where we can deeply integrate the S of ESG in a way that’s coherent and not just some sort of a bolt-on feature in what we’re doing, you know, I think previously property was viewed as being kind of a way to… we measure people’s productivity and enhance productivity through solutions that we deliver to property. I think now we are thinking about it in terms of how do we create better fulfilment and… as a nexus between Government and the third sector and business to deliver long-term solutions to deeply intrenched systemic problems. We think about our problems that we are trying to solve around authenticity, around all sorts of different things that as property people we would never talk about before, I mean these are sort of psychological human characteristics that you wouldn’t necessarily hear around the lunch table at Bellamy’s twenty years ago, it would really be about deals and leases and did you get land this one and did you land that one and what was your profit return on this? I think it’s changed and I think it’s, the genie’s out of the bottle and I don’t think that we can put it back in so, whether it’s B Corp or different certifications or just a different way of doing business, there’s conscious capitalism, build back better movement, I think it’s here to stay. I think what we are going to see is, we are going to see in these visionaries in the property industry that really were focussed on design, I mean, really bold visions around design and I’m thinking of others besides Harry, you know, Simon Silver at Derwent, I mean I don’t think Derwent’s been such a fascinating company to watch, the detail and the design is absolutely unbelievable. But I think we are seeing a transformation now and the leaders of tomorrow will be just as equally passion focussed about green and we sort of need the next generation of leaders to come up and take those ideals about being passionate about delivery of space and greenify it so we need the green Derwent, we need the green seller, we need the green Manhattan Loft Company. I’m fascinated to see some of these companies now start to emerge.
Susan Freeman
I think it would be great if we actually talk about some of the specifics and how some of these, you know, principles play out in your, you know, in your portfolio so, just looking at Windmill Green, which is Manchester, and I think it’s only the second building in Manchester to receive a BREEAM outstanding rating and I was looking at the website and it says “This isn’t your run-of-the-mill office block” so, perhaps you can tell our listeners what, you know, how are you doing things differently? What are you doing there?
Basil Demeroutis
Yeah. Well, I think we talk about tonnes of features that we put into the building and I think those are easy to understand from the sort of panels that we put on the roof that are the highest ever efficient… highest efficiency ever panels that have been put on buildings in Manchester and perhaps even the UK, that come from really the front row seat I’ve had to this new economy and the tech revolution given my connections to Silicon Valley, we’ve been able to source them and we understand where that industry is heading and where innovation is happening now, to the materiality that we put in and the recycled content that we’ve used in materials, it’s got the most amazing green wall that you may have seen with the 5,000 plants that wrap inside, outside, innovations in glass, cement, steel. So, lots of things we’ve done, has the best cycling facilities in Manchester voted by cycle score, digital resilience, it's WiredScored platinum so, I think all these things are features and there’s a long laundry list of them and indeed they’ve I think, I mean my view, we get to, you know, we’ve made a commitment to be net zero carbon across or portfolio by 2025 and I think you get there within a building by hundreds of small little innovations and there’s no silver bullet, I mean there can be sometimes if you’ve got large amounts of space and you can drill boreholes and come up with some sort of single innovative defining technology that helps get you there but I think more often than not, if we’re… especially if we’re trying to address the every building on every street problem, you have 80% of the buildings that are already built that are still going to be standing by 2050. I think it’s these hundreds of small initiatives and indeed we’ve gotten to the point at Windmill Green for example where we’ve reduced the carbon footprint of the building by 85% which I think is a pretty astonishing achievement. But I think it’s also done in a way that’s authentic and I think as we, as all of us, as consumers become more attuned to what’s, what good looks like, I think we could smell something that’s disingenuous a mile away and so particularly in this building when you walk in and you may not even notice it but you know it’s snap decisions that you take when you walk into a space, the volume of light, the materiality, the texture of something, the smell, the sound, again, these things all go into creating an authentic experience and I think that’s where the magic happens in that particular building that it’s all integrated so well and in a way that you don’t necessarily even see it and I think that’s what makes that building great.
Susan Freeman
So, the building was an old office building, wasn’t it? And you chose to retrofit it and, you know, extend it when you could have just, it probably would have been easier to just knock it down and start again but, you know, again this raises, you know, an interesting question because it seems generally to be better to repurpose if you can and use the frame of an existing building but is it more expensive to do that?
Basil Demeroutis
I don’t think so. I think that overall I think sustainability clearly adds something to the equation and we estimate that probably somewhere between 1% and 4% extra costs to do something in a way that’s really pushing the boundaries on sustainability versus say something that’s just clearing the minimum hurdle. I think that retrofitting is such a key, important factor that we do really need to solve as an industry and genuinely it’s great to build these, you know, massive totems to ourselves as a society, as companies, as individuals but at the end of the day if we are going to solve the climate crisis, there is an urgency in our mission that we need to solve it literally, you know, street by street, house by house, and kind of gorilla warfare sort of approach and just blanket knocking everything down and rebuilding it again isn’t going to work, it’s just not and so we feel deeply committed to retrofitting first and to developing this toolkit which allows us to do it in as economically a way as possible. Windmill Green is a great example, you know, we’ve achieved between £34 and £36 a square foot in that building, I mean best rents, Grade A knockdown brand new building, £37, £37.50 so we’re knocking on the door of prime Grade A rents in a building where we’ve spent half as much money and half as much time and we’ve had better leasing velocity than some of the big buildings so I think there’s a turning point in the economic analysis and argument. Another great example is our Cadworks building in Glasgow, I was just up there at the topping out ceremony earlier this week. We actually made the change midstream when we were already on site to take gas out of the building and convert it to all electric and after a lot of hemming and hawing and, you know, late nights sitting around big tables with the team, we actually saved £70,000 in taking the gas out of the building so, it’s not true to say it always costs more, it can, but if you are into the details I think you could find past paths to sustainability that actually are cost savings.
Susan Freeman
And are you finding that, you know, when you are letting your buildings that potential tenants are now asking lots of questions about carbon footprint, sustainability and all these things which they may not have asked, you know, even a couple of years ago?
Basil Demeroutis
I think they are, I think it’s starting to become, to be fair I think there’s a sort of minimum standard now that’s being achieved so I think many buildings that people would go to would satisfy that requirement for occupiers but it’s definitely, it’s super high up on the list of questions that they ask. I think when we get into the detail with tenants and those that are well informed and want to know more about, you know, where does the electricity come from and what exactly what kinds of offsetting are you buying are they preventing deforestation or are they tree planting, are they here in the UK or are they abroad, you know, what kind of technology is actually imbedded in the building? They are starting to become pretty well informed consumers and so they are asking lots and lots of questions around ESG and to really try to suss out who are delivering authentic solutions to the environmental, sustainability question and not just putting together a hodgepodge collection of features that just kind of paper over the problem.
Susan Freeman
And you just, you refer to becoming net zero in 2025, I mean that is just four years away and that is one of the more ambitious targets I’ve heard. I mean, how are you going to achieve that?
Basil Demeroutis
Yeah, a lot of sleepless nights, I think. It sounded like that was a long time from now when we did it but as I keep seeing the clock ticking, ticking forward, we are pretty impatient about making sure that we achieve those goals. As I said, we can be pretty nimble about it so we’re a smaller firm and we can make decisions quickly and we can take decisions that, again, on the surface of it may not necessarily seem, you know, economic or have payback periods but we know that we are able to achieve on the back end higher rents and lower cap rates. I just think that these commitments 2050, 2035 that I hear others making, 2030 is as you know is the UK GBC target, they’re great but I think that our competitors are, who say 2035, 2040, it’s just not good enough, Susan, I mean honestly the problem and the urgency is here, just this week we passed 420 parts per million CO2 in the atmosphere, highest ever recording, recorded levels, we’re half way between pre-industrialised levels and the level which will tip over the scales at more than 2 degrees warming. I mean, I don’t know how you could sit here as someone who’s responsible for 40% of that, I mean we are responsible for 40% of that in our position and to say I’m going to kick the can down the road and in fifteen years’ time I’ll have a solution. It’s not responsible and we feel like we need to do it right now and from a competitor standpoint, you know, it’s great, if people want to make that decision in ten years’ time or fifteen years’ time from now, that’s fine by me because, you know, we’ll have a fifteen year head start and I’ll remind you that from the day the car was first rolled off the assembly line to the day cars outnumbered horses was twelve years in the US so, in a decade things can change like a flash and things that seem impossible, improbable, illogical, unachievable, all of a sudden they are on your doorstep and I think that’s the moment in time where we are now is where we are seeing this rapid acceleration towards a low carbon economy and I think people who do kick the can down the road are going to be caught flatfooted.
Susan Freeman
Well, it’s certainly interesting what you say about it happening quickly because it almost seemed that at the beginning of last year, you know, as you know we went into January 2020, people suddenly seemed to wake up to the problem and it was only about then that we started hearing about property sector being responsible for 40% of carbon emissions and I’m not sure why it took so long for us to get there but then Covid kicked in and I think there was concern that with the focus on Covid and getting out of the pandemic that sustainability would go back on the backburner again but fortunately it hasn’t and I think a lot of people have seen Covid as a bit of a wakeup call, you know, to what needs to be done. But, I mean, in terms of reaching this net zero target, I think your Tower Bridge Court development in London is going to be net, well it’s going to be a net zero office building, I mean is it one of the first in London to be net zero?
Basil Demeroutis
I think there’s been a number of them now that have been announced, whether it’s the first or one of the first or Top 10, I’m not sure and I’m not sure it really matters. I think what matters to us is that we can use that as an exemplar to retrofit, deep retrofit, we’re keeping the frame of the building so we’re keeping all of that embedded carbon in the frame and in the building, adding a couple of floors and recladding it, it’s going to be all electric again and some real cool innovations around materials and things that we are using in the building to try to reduce the embedded carbon as well as the operational carbon. It’s also going to be targeting WELL Platinum so if we’re able to achieve a BREEAM outstanding WELL Platinum EPCA, I think it will truly be one of a few, at that point, handful of buildings in the world to have achieved all of those things and our goal is to really just prove that it’s possible and to prove that it’s economically profitable and we’re not a charity, we’re doing things here because we see powerful, powerful ways of driving financial profit by solving some of these deeply intrenched, systemic global problems at scale and I think that’s the key thing that we need to really achieve here is at scale and so I think that Tower Bridge Court will be a great example of that and, again, there are others done by very clever property firms as well and so we’d be very pleased to be part of that club when it gets delivered at the end of 2022 or early 2023.
Susan Freeman
And I’m intrigued by the flex with purpose that you’ve got planned for Tower Bridge Court. I know what flex is but what is flex with purpose?
Basil Demeroutis
Yeah, well I think it speaks to really the integration of the S and the E and I think, you know when you mentioned tenants and their requests around environmental sustainability, I think they are equally stuck in trying to figure out what their social purpose is, I mean, look I’m an engineer, I’m a property guy, like talking about purpose and happiness and fulfilment and self-actualisation, these aren’t words that are common in the property vernacular, like we talk about concrete and steel and leases and rent reviews and very clinical things but purpose, I think that’s what it’s all about, I mean we’ve doing a lot of thinking and work around happiness and I think, you know, if you talk about people’s life goals and why they do things and whether they want to have a job or they want to make more money or they want to get married or have a family or friendships, there was always another why behind that – I want to get a job so I can make more money, but happiness, there’s no next derivative as to why and fulfilment and these kind of very high order things that we want to achieve in our life are the ultimate pinnacle and I think purpose is a way to drive towards happiness, fulfilment, self-actualisation and I think it’s critically important that we have a open discussion about that in a very sort of non-property way because ultimately these are the problems that are faced by our tenants and their staff and the communities that we serve as property developers and ultimately I think people are going to value property that has a positive impact on driving social outcome, social purpose, happiness and fulfilment.
Susan Freeman
So how in practical terms does it work so, if I went into sort of flex space in your project, how would that help me with providing purpose for my business?
Basil Demeroutis
Well, we are looking to partner with operators or deep drive something ourselves in what we are doing that actually looks to support businesses that either have a social purpose and that are looking to drive that through their business or know that they need to find one and that they want to have our help on that journey and by collecting like-minded companies together that really have a common goal of around purpose, I think that can create a community of self-supporting, self-sustaining firms and indeed individuals that are on this journey together and ultimately come together for some sort of higher benefit.
Susan Freeman
I noticed on Tower Bridge Court, I think you are using Give My View to communicate with the community and I was particularly interested in that because I have interviewed Savannah de Savary for the podcast and how is that helping you to engage with people to find out what makes them happy and what they want from the project?
Basil Demeroutis
No, it’s a great platform and I think we need to find ways to connect with our communities more directly. I think too often there is this adversarial relationship between property owners, developers and the community, be it the obvious ones where you are making a lot of noise and dust in construction and there’s a, and you are disrupting the neighbours but even more psychologically we always feel like this landlord/tenant relationship implies some sort of superiority, the landlord and the tenant, and I think we need to change that and we need to do that by actually starting by listening and any kind of technology tool that helps us to listen, I think I’m all for it and so we try of course listen to the vocal minority, they are important, but we try to also listen to the silent majority and really understand what they’re doing, again as a problem solver I do believe that very problem has a solution but we also need to make sure that we are solving the right problem, I mean Einstein has this great quote, he once said, “If I was given an hour to solve a problem in order to save the world, I’d spend 59 minutes figuring out what the problem was, 1 minute solving it.” It’s an eloquent little quote but it’s true, I mean we just sit there sometimes as property developers and impose some sort of solution on a community without necessarily listening. Tools like Give My View I think are a great way to connect and use technology for a bit of social good.
Susan Freeman
And do you find that by using that platform you are able to reach the younger generation because historically, you know, the vocal minority have tended to be, you know, retired people who have got the time to come to, you know, meetings in Church halls but this seems to be like a really good way of engaging the next generation?
Basil Demeroutis
It does. I totally agree and, you know, Tower Bridge Court, for example, we’ve carved out about 4,000 square foot of space, a not insignificant sum of the building, and we’re calling it an urban village hall and we’re going to co-curate that space with the community for a good chunk of the year so, what would people like to see there and how do you find out, how do you reach them? You know, this is where, you know, my background helps because I’ve spent a fair amount of my last twenty, twenty years focussed on social enterprise, social entrepreneurs, the social impact side of the world and so we’ve spent a fair amount of time really trying to reach out to the community groups to understand is, I don’t know, skills training an issue or is it really more about jobs or are there language issues that we need to try and help solve, like, what is the problem that you are trying to solve and then go and solve it.
Susan Freeman
And are you surprised by, you know, any of the responses that you are getting because I suppose you go into these, you know, into a development, you know, and you think you know what the community should want but I just wondered whether you’re, you know, you’re getting replies that weren’t exactly what you were expecting?
Basil Demeroutis
Yeah, no, we always get interesting responses and I tend to try to read a lot of them to try to get a, you know, sense myself of what people are looking for. They are rich and varied and, you know, some are really quite granular and specific and then, but yeah, it’s a pretty diverse, you know, set of responses that you end up getting with these things.
Susan Freeman
And you were talking about the relationship between a problem and solution and that is so true of, you know, the emerging Proptech, you know, sector and one of the concerns is there are a lot of solutions out there but they don’t necessarily, you know, deal with a problem that anybody has, you know, feels is a problem or a pain point, I mean, how do you see that in the sort of Proptech that you are introducing into your buildings?
Basil Demeroutis
Yeah, completely. I mean, look I think if you raise your hand on social media and Twitter and LinkedIn these days and you sort of, you try to pause on the whole, you know, office is dead, technology is going to save us, you really get your head shot so I, you know, but I’m not one to sit idly by. I mean, I’ve had, again, I’ve spent a fair amount of my life really at the… deeply integrated with people who are creating software and technology solutions that scale to sort of some pretty complicated problems and you know we were C round investors in Tesla when I was at the family office and have fostered innovation and battery technology so I’m a technologist, I’m an engineer so, I get it. But at the same time, I think there’s a, we have to remember that there’s a slightly darker side to technology and if you were to kind of look over the last, I don’t know, fifteen years or so that Facebook has been around and Instagram and Twitter and these technology solutions that we’ve heard these stories before haven’t we and these are going to create communities and foster deep connections across the miles and engender a whole new breed of interpersonal relationships that would never be possible before. Have they? I mean, I think we just, we need to pause and ask the question whether they have or not because at the same time as we’ve seen the rise of these, particularly in social media platforms, technology platforms, we’ve seen falling life expectancy in the US, falling happiness actually if look at happiness in the US, 1950 to today, happiness hasn’t risen, hasn’t changed end point to end point in a time of unbelievable technology, innovation and wealth creation and the rest, we’ve seen rising suicide rates over the last fifteen years, greater social isolation and it’s… someone has to really reflect on the fact that it’s not without a modicum of irony that these platforms that were there to design… designed to connect us, have actually had exactly the opposite effect in many cases. So, yeah, I’m not anti these things, I use it, we use it in our building, we’re deep believers in technology, we’re… in our office here we’ve got the whole thing spammed with sensors, I could tell you about the CO2 levels and occupancy sensors and the rest but let’s just remember that there’s a dark side to this and we need to solve the bad as much as we do for the innovation piece.
Susan Freeman
And do you think that what’s happened over the last year, you know with Covid and a succession of lockdowns, is going to cause people to have a bit of a reset on, you know, what they want, you know, from their lives? Are cities going to change? Are we going to carry on sort of like living more locally or are we going to bounce back? I mean, how do you see things happening?
Basil Demeroutis
How can it not change? I mean, I’m a firm believer in that change is coming, it’s probably coming quicker than we think. I think if you look back again over time, I’m a big student of history and I think you look at these moments, I think that we tend to polarise the outcomes in the midst of these things so there’s the work from home crowd who are never going back to the office and there’s the ostriches that have their head buried in the sand and I think, you know, the truth lies in the middle, I think there’ll be some sort of a mixed model, you know, whether it’s two days a week in the office or three days or five days, some companies will adopt 100% work from home, some will say no way, you’ve got to come into the office. I think we’ve realised that in this period of social isolation that we need human to human interaction and as wonderful as these tools are and as great as it is to see you, I’d love to be on the tiles at MIPIM with you again like we were ten years ago and sharing a glass of champagne at some random party, like, you can’t replicate that and no manner of Zoom drinks and fancy dress evenings can replicate that. And I do think that we need to come together. Now, I know you are a big fan of the word ‘collaboration’ so I’m going to call you out on it because I think we’ve banned the word collaboration now in our office, it’s sort of a, it’s no longer allowed to be used. I think people throw it out there, you know, “We need to come back to the office to have collaboration” and I think it’s, again, it’s cutting to the answer without really understanding like what it is, like, okay so how are you collaborating? Are you just like pushing all the desks to the corner like you are having some sort of high school dance and that everyone is going to magically collaborate in the middle? No, that’s not how collaboration happens. Collaboration happens when you create safe spaces for people where their opinions can be heard, where their opinions can be valued, where they feel like they are in a trusted, safe environment. So, let’s talk about that and how do you create that? We’re not creating collaboration, we’re creating the environment in which people feel safe, valued and that contribution matters.
Susan Freeman
I’m glad you raised that because I was looking at, you know, one of the articles where, you know, a whole number of property companies were talking about, you know, why they felt it necessary to get everybody back to the office and the word ‘collaboration’ sort of came up in just about, you know, every comment so, you know, it does make you sort of sit back and say okay, you know, how is this going to work but it is quite interesting, actually, how people have been able to collaborate over Zoom and Teams and, you know, one of my questions is, you know, that works, you know, to a certain extent but how many Zoom meetings do you have to have with somebody to build up the level of trust in the relationship that you would have, you know, if you had, you know, if you met somebody on a regular basis? I’m not sure how the trust word works in relation to remote meetings.
Basil Demeroutis
Completely and I think people, you know, there’s been lots written on it and without wanting to really go over too much old ground but I think we need to think about the kind of social capital that we have in the bank, like you and I know each other so we’ve got social capital and I could call you up and we don’t necessarily need to be in the same room together or people we know really, really well or colleagues or, you know, but at some point the bank of social capital, you keep making withdrawals and then you’re out, and so you need to recharge that and so I think, particularly for people in the younger parts of their careers, as many have written about, it’s a disaster and I mean genuine, genuine disaster for them. So, I think we do need to bring people back, we need to have that and then there are just things that you can’t do over Zoom, you know talked again about this higher order purposes that we are trying to, all of us are trying to now achieve, like altruism and these sorts of things, I mean, how do you do that over, in a virtual sense? I mean, I think of very complicated social issues and I think that’s why I really powerfully believe that as property owners and property developers, we need to be as much as psychologists, anthropologists, human behaviouralists as we do just boring property people as we were twenty years ago and I think that genie is again out of the bottle and I think there’s no going back on that either.
Susan Freeman
And do you think, as a sector, real estate needs to be doing more to get you know some of these positive messages across because clearly things are changing in a big way because the BPF perception survey which is now a couple of years ago, showed that only 27% of the public had a positive view of the real estate sector. Should we all be doing more to try and, you know, change that by changing the way we work?
Basil Demeroutis
Completely, I mean, I think we need to be on the front foot and again, not that many people are coming out advocating for the office or advocating for property more generally, I mean, you know, property is where all this magic happens, it’s where you get married, it’s where you are born, it’s where you get educated, it’s where you fall in love, it’s where you fall out of love, it’s… I mean it’s literally it’s where, you know, economic activity takes place, it’s where works of art are created, I mean, this all happens inside the four walls of the building and to think that those shape and format and colour and configuration of those four walls doesn’t somehow have an impact, positive impact, hopefully on these sorts of things. I think it’s a mistake and we need to really be advocating for the positive contribution that we can make and it’s also when you think around innovation, I think of innovation building materials and how we are going to solve the climate crisis by driving carbon out of big problematic and hard to abate sectors like concrete and steel and these are solutions that are coming out of the property sector, it’s coming, you know, demand pull from firms like ours that are saying to the manufacturers, hey no, no, you can’t manufacture that product like you used to before because that’s not good enough for us and so we are driving innovation and we are driving positivity and I think we have a positive contribution to make to purpose, to happiness, to fulfilment and all these sorts of things and we need to be unapologetic advocating for that.
Susan Freeman
I think that’s, I think that’s a great, great message and a good place to finish and I love that expression, you know, property is where magic happens, I think. I think we need to get that message out, I think that’s great. So, Basil, thank you. Thank you very much and I look forward to seeing you in real life again very soon.
Basil Demeroutis
My pleasure. Thank you, Susan.
Susan Freeman
Well, it was really great hearing from Basil who is leading the charge on socially responsible property development.
So that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
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