As 2016 begins in earnest, we wanted to share our views on the UK real estate job market in 2015 and our expectations for the year ahead.
2015 was an interesting year for real estate executive recruitment. After a strong start, the middle to senior level job market slowed down pre-election then never fully got back up to speed. There were however new areas of growth as investment management clients confidently expanded their real estate product offering.
As a result, we helped to build teams in Capital Solutions, Residential Investment/Fund Management and Regeneration Development.
Most of the recruitment activity in 2015 came from the property agencies, as various changes continued post-mergers and acquisitions. There were also a number of new opportunities at Analyst/Associate level within the London based private equity firms. This was largely due to new capital being raised for value-add and opportunistic real estate investment in the UK and Europe.
However, as we enter 2016, there is a mixed sense of both hope and caution as many people feel that we are beginning a new stage in the property cycle.
So, what does this mean for the real estate job market in 2016?
In the UK, we expect further fall out from the agencies and the banks, leading to additional openings, but also a more competitive job market.
In spite of the issues posed by an archaic British planning system, Development seems buoyant, with ongoing construction in the major cities and regeneration schemes emerging UK-wide. Post-recession, qualified Development Surveyors with 5 to 15 years experience are still scarce. It therefore remains a candidate-led field with high level salaries on offer for the right skill mix. 2015 saw an emphasis on ‘front-end’ development as competition for new schemes increased, while Development Managers with large-scale, mixed-use development expertise were also in demand.
As investment shifts towards the regions, commercially adept Investment professionals with UK-wide networks will be highly sought after. There have been considerably fewer top-end moves over the past 12 months; the Investment Directors who did make a career change tended to join more boutique firms. Some of these moves were direct appointments where the candidate was already known to the hiring client (through existing contacts or through JV partnerships). Appointing a ‘known entity’ can be beneficial as it mitigates some of the hiring risk for both parties (candidate and client). However, it is difficult to know whether the best person has been appointed to the role if they have not been ‘benchmarked’ against the wider market. It does go to show however that it is worth maintaining good relations with your market contacts!
While high-end residential looks less attractive over the coming year, the Private Rented Sector (PRS) is undoubtedly a growth area. Further vacancies are therefore likely to arise in that sector over the coming months. As this is new territory for most firms, it continues to be a problematic area to recruit for, as there are limited numbers of experienced candidates. As such, the market has looked towards the house builders and residential agency teams for potential talent pools.
As attention turns towards maximising rental growth and income returns in 2016, companies will need a strong team of innovative and competent Asset Managers. As the market becomes more specialised, clients are likely to hire strategic Asset Managers who have a strong knowledge of/contacts within a specific sector. In early 2015 we saw an inordinate number of hiring requirements for retail asset managers with 5 to 10 years post-MRICS experience, which created a high demand/high value market. There was also an increase in industrial/logistics led asset management positions, as that sector outperformed; a trend that is set to continue through 2016.
With the mix of foreign investment set to change in 2016, there is a constant need for well connected Business Development / Investor Relations / Distribution experts with a proven track record in raising capital for both real estate and infrastructure. In particular, IMC/CFA qualified professionals with Asian-based investor contacts will remain in high demand.
As many large companies move towards building combined ‘Real Assets’ teams it is important for potential candidates to not only specialise in their own field, but also to take a genuine, wider interest in alternative investments moving forwards.
Overall, we believe that the job market will remain strong but steady through 2016 and we look forward to assisting you with any hiring requirements at the middle to senior management level.
Happy New Year from Summit Search & Selection Ltd!