The Crown Estate's Alison Nimmo: I Love This Industry, But It Needs To Change
It is pretty strange to hear the chief executive of the 250-year-old property company whose assets are ultimately owned by the Queen namecheck WeWork as the firm’s biggest influence. But change is on Alison Nimmo’s mind.
Specifically, she is considering how to change the Crown Estate to make it fit with the modern era but also keep it true to its roots. She is wrestling with the huge changes to the way people work, and what that means for the Crown Estate as a business. And she is grappling with how to provide leadership and affect change in an industry suffering from a chronic lack of diversity, an industry that can still, in 2018, end up at the centre of sexual harassment allegations like those that have emerged after the annual dinner of the Presidents Club.
Nimmo is quiet but assertive, at times inspirational in the way she speaks. Unshowy and humble, she takes a desk in the Crown Estate’s new open-plan office rather than sequestering herself away, but exudes leadership as much as any chief executive in real estate, and is just as focused on the future as any skinny-jean wearing PropTech disruptor.
Nimmo has spent her career building and rebuilding cities: first Manchester after the IRA bomb of 1996 as project director of Millennium Manchester; then London, as director of design and regeneration for the Olympic Delivery Authority in the run up to the 2012 games. And now, as head of the Crown Estate, her £13B portfolio extends wider still.
The Crown Estate is the kind of body that could only exist in a constitutional monarchy like Britain. The portfolio as a whole can trace its roots to 1066, but the Crown Estate dates back to 1760, when George III struck a deal: The Crown lands would be managed on behalf of the Government and the surplus revenue would go to the Treasury. In return the king would receive a fixed annual payment — what later became known as the Civil List. The Crown still owns the land.
The arrangement has changed slightly — now instead of a fixed payment the Crown receives 25% of the profit made by the Crown Estate. Last year that profit was £329M, and the figure has risen each year under Nimmo’s leadership.
The assets include central London gems such as the entirety of Regent Street and a big chunk of St James’s; a £2B regional retail portfolio; Windsor Great Park; more than 100,000 hectares of British farmland and forest; and the seabed 12 miles out to sea of about 55% of Britain’s foreshore, which it leases out to the developers of wind farms that produce 5.1 gigawatts of energy per year.
The biggest change in the Crown Estate began in 2010 when for the first time it brought in a joint venture partner, selling a 25% stake in Regent Street for £450M to Norway’s sovereign wealth fund, Norges Bank Investment Management. The street has changed from a haven of shops selling tartan and tat to one where major international brands like Burberry or J Crew set up flagship stores.
“That created a strong, long-term partnership, and it meant looking after someone else’s money,” Nimmo said. “It meant we had to better measure performance and how the business was run, how we reported. It started the change from being a traditional landed estate to a modern, progressive company.”
London is, as Nimmo puts with a subtle irony, the crown jewel of the portfolio, producing income of £207M last year.
“Central London has performed pretty well over the past 300 years, and that is where we have scale and a depth of expertise,” she said.
The £450M netted from the sale of Regent Street was reinvested in other new central London developments, like St James’s Market, a £400M office, retail and restaurant scheme where the Crown Estate partnered with Oxford Properties. It is the centrepiece of a wider makeover of St James’s.
The Crown Estate sought to ensure that the scheme reflects what Nimmo said was the looming revolution in the way people work.
“People focus on the winners and losers in retail, but there has been a real revolution in the workplace, and a large chunk of our London portfolio is given over to offices.
“We’ve been around and looked at the best of what other people are doing and tried to steal the good ideas. We like what WeWork are doing, the way they personalise space, and we like the idea of creating an ecosystem within a building and flexibility within the space.”
Nimmo said the Crown Estate was taking a pause for breath on its London development programme now conditions in the market had changed.
“I think we got our timing pretty spot on, in terms of coming off a big leasing programme and having it finished and leased before the market softened a bit. We switched our focus to regional retail, and now we’re undertaking some smaller developments while we prepare for the next development cycle.”
The St James’s Market scheme has been central not only to the Crown Estate’s London development portfolio, but also the process of change that Nimmo has sought to continue at the company. Last year its 260 London-based employees moved from an office off Regent Street to a new office in one of the buildings on the scheme. And again it tried to incorporate that WeWork ethos of the personal and flexible.
The office has seven desks for every 10 people, booths so people do not have to book meeting rooms and coffee machines that are operated through an iPad. Meeting rooms are arranged around the core so desk areas get as much natural light as possible.
Wellness is a big part of the design and ethos, and the Crown Estate is hoping to receive WELL certification soon. Desks can be raised so that people can work standing up — very popular in the afternoon, apparently — and green walls abound, covered in both plants and moss. Food is not permitted on one of the two floors it occupies, where staff work, meaning people have to go to the seventh floor cafe to eat lunch, forcing them to take a break from their screens.
All very now, but there are touches that remind you this is a unique company with a long history. A large communal table in that cafe is made from a single cedar of Lebanon tree, which had stood in Windsor Great Park since 1760 and died recently. Another high table is made from an oak from the park.
“It’s a nice way of making it ours,” Nimmo said.
In terms of the changes to the way the company works, Nimmo, as is her style and reminiscent of a tech company running a beta test, engaged staff before the move, allowing them to trial certain elements before they were incorporated into the new building.
“I won’t say I wasn't nervous before we made the move, but people took to it naturally," she said. "We want to be an agile company. My test was, can someone come in on the first day, plug in their laptop and be up and working within half an hour, and thankfully that was the case. I breathed a big sigh of relief.”
Her physical location in the office epitomises her approach to management — she is in among the staff, with no perks that others do not receive.
“I love it,” she said. “I think the days of the distant and fearsome CEO, who sits behind a PA and a closed door in a corner office, stealing the best spot and all the daylight — is over.”
So what does make a good real estate chief executive in 2018? For a long time great real estate firms have been associated with forceful personalities, individuals and entrepreneurs who often build companies or great schemes from the ground up: the Ronsons, Reichmanns and Silversteins.
Clearly that kind of leadership would not fit at the Crown Estate, but nonetheless Nimmo’s ideal of a leader is far more republican than property has been used to.
“I think it is someone that can have vision and a strong, clear strategy for the business,” she said. “And you need to create and build a really talented team and empower them to deliver the best result possible. You need to set a long-term strategic framework and create the best environment for them to do what they are best at.”
Nimmo is passionate about making sure the team she creates is as diverse as possible, and said the real estate industry needed to do more to promote diversity of all kinds. The conversation took place a few days after the emergence of allegations of sexual harassment at the annual dinner of the Presidents Club, an event at which more than half of the tables were sponsored by real estate firms. Her views about what the industry needs to do to become more diverse were inevitably framed by events that have shown the sector in a very poor light.
“First it has got to stop the bad behaviour,” she said. “I thought the industry had moved on. It’s a sector and business that I love, and there are some great people in it, and you see these stories and you don’t really recognise your own industry, but there are clearly some pockets of it that are still in the dark ages. Well done to the [Financial Times] for reporting this, I hope it will create a momentum for change. I think most people in the industry find what they have read very distasteful.”
The second area Nimmo outlines echoes her views on management generally, creating workplace behaviours and environments that allow anyone to thrive. Here again real estate can be viewed in a poor light, given the lack of female representation at almost all levels.
“If people don’t feel valued in the workplace then they vote with their feet, and you lose out on the best talent,” she said.
Finally, senior figures like herself need to be proactive on the issue of diversity.
“Strategies need to be put in place in the boardrooms, it has to be part of the overall culture and come from leaders. We do a lot in partnership with organisations like Real Estate Balance, the RICS and Stonewall, and go into schools and universities that might not typically have a link with real estate.
“I’ve always loved cities and been fascinated by how they work. I was part of rebuilding Manchester after the bomb and part of the team that created a new piece of London as a legacy from the Olympics. Property as a sector is about how we live and work, what could be more exciting than that? I think as broad a range of people as possible should be involved in that.”