A new research project on the levels of conflicts of interest in the commercial property sector is to be led by Professor Gerard McCormack and Mr Adam Baker.
The aim of the project is to develop a white paper which will evaluate whether commercial occupiers and landlords are being treated equally within the real estate cycle. Researchers will also look at whether the interests of commercial occupiers and landlords are being represented fairly by national and multinational property advisors. A number of senior leaders from some of Britain’s largest small- to medium-sized businesses (SMEs) and business organisations will provide insight and feedback for the research.
In 2014 nearly 20% (1,230,315 sq ft) of office lettings in central London, which is the world’s most expensive and active commercial property hotspot, were handled by agents who represented both the landlord and prospective tenant within the same transaction. This white paper can uncover the potential for manipulation, onerous terms and multi million pounds in overpayments or savings within the office, retail, restaurant, leisure and industrial sectors. This therefore has an effect on every business in the UK. The research aims to provide greater transparency across a multi-billion pound industry.
Professor Gerard McCormack1 is leading the project with Mr Adam Baker2, a lecturer in property law. Professor McCormack said: “We believe there is a very real need to establish whether the existing practice of how commercial real estate agents advise both landlords and tenants is truly fair and transparent to everyone involved. As it stands there are only a miniscule number of commercial property agencies operating a ‘conflict free’ proposition for either occupiers or landlords. The vast majority of the market comprises of agents who primarily represent landlords, but will also try to act for commercial tenants. The legal and finance industries seem to be clearly regulated and lead the way in transparency, so it’s time we evaluated whether commercial property, which affects all businesses, needs to follow suit.”