Market woes? Not as far as I’m concerned

By Candice Krieger, October 17, 2008

Property chief Robert Leigh may be forgiven for feeling a little smug. When Mr Leigh, now 29, established his commercial-property agency Devono in 2003, he received no support from the industry and was not well-received by existing agents.

Traditionally, rental-property agencies act on behalf of landlords to achieve the best deal for them. Mr Leigh's company, which he runs with business partner Adam Landau, works exclusively on behalf of tenants seeking to rent office space in London. It claims to be the only agency in the capital to do so.

Five years on, and Devono has been named London's number-one office-finder by the Estates Gazette and the CoStar Property Group. Last year, it achieved the highest number of acquisitions in Central London, more than industry heavyweights Jones Lang LaSalle, CB Richard Ellis and DTZ. Devono placed 83 clients last year, taking a four per cent market share and £15 million worth of rent roll. This year, it has moved 60 tenants so far and is on course for a £2.5m turnover.

"Commercial property is quite an archaic, old-fashioned industry," says Mr Leigh, who was recently named as one of the most successfully entrepreneurs in the UK by Young Guns, an initiative that celebrates individuals under 35 excelling in business. "When I came to the market, it wasn't a well-received product among existing agents. They didn't like the concept because it was change. There was a lot of criticism behind Devono's back. Now, we have gained their respect through the deals we have done."

Devono clients include Manchester United, Universal and Eon. "We were doing office viewing with the Glazers for Manchester United. "We are dealing with people of a very high level, who recommend us. We are now a serious player within the commercial market."

What makes them so successful? "When it comes to tenants, we have no conflicts of interests. Our loyalty is with them. We can tell them how bad the market really is. We can be absolutely transparent. What the market does is irrelevant for us. It only affects us if there are fewer businesses looking to move."

Mr Landau, 29, adds: "We are not stuck with space that we need to dispose of. We don't have landlords breathing down our neck."

Devono's job is to find clients a building and, with more properties becoming available, Mr Leigh is pretty upbeat. "Now is a good opportunity for us. A lot more bank-end leases are coming to the market where landlords need to dispose of their space.

"Twelve months ago we were in a landlords' market, now the shoe is now firmly on the tenant's foot in the City. It's slowly getting that way in the West End.

"Everyone says the market is getting worse but it's not getting worse for tenants, it's getting better."

A former JFS pupil, Mr Leigh began his property career in the mid-90s, working in the residential sector. He then moved into the commercial side and became a partner in a small agency. He raised £40,000 through the Government-backed Small Firms Loan Guarantee Scheme, in addition to £20,000 of his own money to set up Devono. He repaid the borrowing within three months, "after a couple of deals", and landed his first big deal within four. This was with government-funded organisation Constructing Excellence for a great big fee, as Mr Leigh puts it.

He acknowledges that he has had it pretty easy since then. "Young people - those under 30 - have only known good times. This is the first downturn I have witnessed and if I said it wasn't something that was on my mind I'd be lying. But unlike residential property, businesses have to move. They can't stand still." How has the market been affected? "The credit crunch in the West End has stayed fairly insulated because there isn't a lot of office accommodation available there. Mayfair rents have stayed fairly firm but no one in this market place is achieving rents above £100 per sq ft," says Mr Leigh, who views up to 150 buildings a week.

"The City is on its knees at the moment. There's eight million sq ft of office space under construction or coming to the market over the next 12 months. It's flooding the market with available space. We are running riot in the City and achieving rents of £25 per sq ft below quota rents and, on five-year leases, as much as 12-month rent-free periods. Landlords are very nervous. They are thinking: ‘I just want to let my building because if I don't, will it be empty for the next few years until the market picks up again?'

"So, rents in the City have drastically fallen and the West End market will slow down over the next six to 12 months, when a lot of businesses unfortunately go bust. There will be an exodus of businesses moving to the City, and many companies will be downsizing to a more cost-efficient space."

Mr Leigh lives in South Hampstead, North-West London.

Last updated: 4:21pm, October 16 2008