Greycoat CEO Nick Millican’s Growth Hack? Strategic Partnerships

As the CEO of London-based property management and development firm Greycoat Real Estate, Nick Millican has helped steer the company through a tumultuous decade, from navigating the aftermath of the global financial crisis to maintaining operations and even growing despite many industry-changing challenges that arose due to the COVID-19 pandemic. Muted economic growth, technological advancements, changes in worker and client needs, the increased focus on environmental, social, and governance aspects, and a generally restrained and restricted appetite of investors for new investments in the property space have made not just staying afloat, but expanding, a considerable challenge for many property management and investment firms across the board.

To counter these challenges, Millican and the Greycoat team have developed a multipronged approach to maximizing value and returns in a dynamically changing real estate market — one that was long seen as a bastion of stability and consistency but has rapidly evolved into a fast-paced marketplace readily impacted by local and macro developments.

One thing Nick Millican says that Greycoat Real Estate tries to do is capture some of the value gap between underinvested older infrastructure and the new generation of buildings. He says: “There are two real avenues to business that we are focusing on. One is buying a building that is either vacant or will become vacant in the short term and doing what we would call a heavy repositioning there, and the other is buying buildings where there are existing tenants and doing a less intensive scope. In both scenarios, we find the teams, partners, and investors we need to make value-generating changes to existing infrastructure and raise those properties to a new level of service provision.”

Repositioning and Refurbishing

The heavy repositioning of an existing building involves replacing all of the mechanical and electrical plant in a given building, potentially reglazing it, installing new windows and other amenities, making material changes to the interior structure in terms of lobbies and common areas, and focusing on delivering a new specification building at the end of that process. The less intensive refurbishment involves installing upgrades in existing buildings, redesigning certain areas to provide, for example, multipurpose rooms or collaboration tools, and iteratively integrating new offerings over time.

Last year, in what could be called a relatively quiet time for the London property market, Millican and Greycoat executed no fewer than three large-scale property deals. In December, the company acquired a 140,000-square-foot property at 20 Finsbury Dials with Goldman Sachs, with comprehensive rehabilitation and refurbishment planned that will deliver sustainable and environmentally friendly office space to clients in a prime London location. This deal was closed a few months after Greycoat Real Estate completed a £315 million (approximately $400 million) office acquisition from Shanghai’s Shimao Group at a discount of approximately £50 million less than what Goldman Sachs was prepared to pay for it just one year prior. 

Nick Millican: Focus on the Bones

Nick Millican says that cooperation and collaboration have always been the cornerstone of how Greycoat operates. “As a developer, what we focus on is making sure the bones of the building enable someone to do that. So typically, we’d be very focused on provision of outside space for tenants, provision of an entrance experience that typically would have breakout space, cafe, etc., at the lower ground floor to give a bit of atmosphere and environment for tenants in a building.

“How they occupy the space themselves is largely down to the business themselves, and so what we try and look for is a building that offers flexibility so it appeals to the maximum number of tenants who would occupy it in different ways, rather than a particular focus of a tenant occupying your building in a certain way and suiting a certain type of workload.”

The other significant consideration is carbon and energy performance. Millican explains that if you look at the professional services business, of which there are many in London, you’ll find that the three major drivers of carbon emissions are business travel, how people get to work, and the carbon footprint of the buildings they occupy. Giving staff the option to come in via public transport or bikes, for example, or reduce a building’s carbon output must be part of the planning process here.

In general, Millican says that London’s labor market is relatively tight, but as people are revisiting working practice, whether it be coming back in from a work-from-home dynamic or adapting to a more networked business environment with tools such as Zoom or Microsoft Teams, there’s quite a lot of revisiting of working practices and what dynamic businesses of today and tomorrow expect their buildings to offer them and their staff.

So, what does this mean for the future?

Millican says, “I think at the minute we feel that sentiments have led to an overcorrection of office prices in some areas and with some criteria building. So some stuff is probably cheaper than it should be if you take a medium-term context, and so we’re quite keen to take on new projects.”

This means that certain properties are cheaper than they should be if you look at them from a different or longer-term perspective. Opportunities such as these only come along once in a while, but it helps to have relationships with firms and partners such as Goldman Sachs, Morgan Stanley, Canada’s Ivanhoé Cambridge, Singapore’s Wing Tai, Germany’s Union Investments, Heitman, Oaktree, and other blue-chip real estate and financial market investors and managers that can help make each Greycoat project a success.

Nick Millican and Greycoat Real Estate focus on the London market and have unmatched insight and access to the local business infrastructure. However, capital investments by global heavyweights and partners are essential parts of the equation as well. By maintaining a diversified portfolio, smartly assessing available opportunities, and having the right relationships and partnerships in place to make things happen, Nick Millican is confident that Greycoat will continue to lead the way in improving and growing the capabilities and offerings of a London real estate market that is quickly on the rise. 


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