Property industry must ‘sort itself out’, says Oglesby

THE property industry has to “sort itself out” to ensure it can negotiate future economic and regulatory challenges, says Bruntwood’s chief executive Chris Oglesby.

Speaking at a Pro Manchester event last week on new “slotting” rules affecting bank lending to the property sector, Mr Oglesby said the industry had to take a long-term view and improve governance.

Bruntwood owns and manages more than 100 buildings, most of them in the North West.

Under the Financial Services Authority rules banks will have to “slot” loans into different risk categories and each category requires them to hold a different amount of capital on their balance sheets.

The move is widely expected to lead to less lending and make loans more expensive. It’s predicted more debts will be called in rather than refinanced.

Mr Oglesby admitted the prospect of slotting had drained confidence but he said the rules would probably have the same impact as market forces on bank lending decisions.

He stressed the market was more buoyant than it had been for some time, with a shortage of supply in Manchester, and said it was important for property professionals to keep working on “bankable propositions”.

“Property has to sort itself out and focus on things we can control,” he said.

“If property is going to create more bankable propositions and move up these slots we have got to put four basic things together: create more strong propositions; have a team looking after the property; we’ve got to have equity; and have organisations that can handle debt responsibly.

“The sector has got to sort its governance out. We’ve got to create vehicles that are responsible enough to handle that sort of money.”

He added: “If the industry starts to put together bankable propositions the money is out there.”