Industry insights from the heart of Howard Group
hive issue 05 Summer 2017
THE WORKPLACE OF THE FUTURE AS MILLENNIALS BECOME MORE INFLUENTIAL, HOW WILL OFFICE SPACE EVOLVE?
The deals hitting the headlines
Will Cambridge's tech bubble burst?
The latest from the Howard community
hive - EDITOR'S NOTE
CHANGING TIMES Howard Group CEO, Nicholas Bewes
We’re adapting now in order to compete in the future. Over the past two years, I’ve observed an immense rate of change far beyond anything I have previously witnessed. Aside from the more obvious political and socio-economic factors, advances in technology and an ever-growing awareness of the changing mindset of the next generation have provided a catalyst for radical shifts in business best practice. With this backdrop of enormous change, we’re presented with both opportunities and risks. As a business with a long history of entrepreneurialism, the question we must now ask ourselves is how can we take advantage of these changes to shape our future? Equally, we must consider how we insulate our business against the adverse consequences of these changes to ensure we remain competitive, relevant and wellfocused. So how do we stop change from overtaking us? Embracing, anticipating and investing in change is in our DNA at Howard Group. We’re looking
ahead beyond a five-year plan, focused on how our business needs to operate as we get closer to our centenary. This has implications both internally, and in how we predict the market will evolve, particularly for our property division. We’re already focused on how the working communities of the future are going to transform. Over the coming decades, a new generation will mature with different expectations, ambitions and priorities. The physical working environment will inevitably need to adapt and our approach to designing and developing those spaces must respond accordingly. With regard to our investment business, Howard Capital, we’re excited to have invested in a number of technology-driven companies, several of which could be considered disruptive in their sectors. Leading edge technology inspires us and the ability to move quickly means we’re in a strong position to capitalise on attractive opportunities early on.
On the cover... PLACE OF
TIAL, E INFLUEN OME MOR IALS BEC CE EVOLVE? OFFICE SPA HOW WILL
Embracing, anticipating and investing in change is in our DNA at Howard Group
To remain relevant and competitive, it is essential that we take a proactive stance. We must continuously evolve to ensure we have a business that is both agile and sustainable. But what does this mean for us as an employer? Changing career expectations are already influencing the way we incentivise and motivate our people, and this awareness will ensure we continue to be an attractive employer for those who share our values. Again there are both opportunities and challenges ahead of us – so taking the long-term view is essential. Although the current rate of change may prompt us to face certain challenges earlier than expected, this absolute need for dynamism has the upside of injecting renewed energy into our daily activities. For family businesses in particular, this is a major theme – evolution is key to preserving heritage – and those who anticipate change and adapt are best placed to thrive in volatile times. It’s a time of transformation for all of us at Howard Group and we’re ready.
Samsung's American headquarters in San Jose California houses more than 2,000 employees and is designed to foster innovation. Global architects NBBJ included a ten storey tower in the centre of the development to create a powerful brand image for the company.
Cover: Samsung’s American headquarters in San Jose, California © Tim Griffith for NBBJ Architects P3: Werrington Centre, Peterborough © JLL P3: Cambridge Assessment’s new headquarters © Cambridge Assessment P4 & 5: Bill and Melinda Gates Foundation © Sean Airhart for NBBJ Architects. 250 High Street © Sean Airhart for NBBJ Architects
COVERING THE ENTIRE SPECTRUM OF PROPERTY ACROSS THE SECTORS, THESE ARE THE DEALS THAT ARE CREATING A BUZZ. PROPERTY GROUP SELLS FINAL STAKE IN REGIONAL SITE The recent sale of Howard Group's final assets at Peterborough’s Werrington Centre marks an important milestone in the strategic repositioning of its property portfolio. The Acorn Business Centre and accompanying development land at the Werrington Centre has been sold to Knightsbridge Real Estate Asset Management, with Melbourne Holdings purchasing the office buildings iGO4 House (20,194 sq ft) and Olympus House (17,729 sq ft). The transaction, which generated in excess of £3.1m, marks the end of an era for the business, which purchased the site in 1997. Howard Group was instrumental in achieving planning for a 75,000 sq ft superstore on the site prior to selling a large part of the centre to Tesco in 2007. This final disposal of non-core legacy sites completes the strategic repositioning of Howard Group’s property portfolio. Over the next five years, it will concentrate its efforts on securing larger and geographically targeted quality investments and development opportunities in Cambridge, the wider region and into London.
CAMPUS OF THE FUTURE
NEW OFFICE SPACE TO BE LARGEST IN CITY
Howard Group has unveiled a new masterplan for its commercial property in Sawston that will transform its current holdings into a new £60m business campus. The plans will revive Sawston Trade Park, which currently comprises units nearing the end of their lifespan, as well as development land bordering the adjacent Iconix Park. The campus will provide up to 260,000 sq ft of space to help meet the demand for office, research and development lab premises at the heart of the biomedical cluster in south Cambridge, including space for small-medium sized businesses.
Cambridge University’s international exams group, Cambridge Assessment, is nearing completion of its new 360,000 sq ft headquarters. The £120m building will accommodate up to 3,000 employees currently spread over 11 office locations in the city. The self-contained Grade A office space will be situated to the south-east of Cambridge city centre. This will be the city’s largest single-occupier development in recent Cambridge history and looks set to be completed by the end of 2017 for occupation in early 2018.
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03 hive - HOT PROPERTY
hive - OFFICE FOCUS
MILLENNIALS ARE BRINGING NEW IDEAS TO THE WORKPLACE
A NEW DAWN at the office The workplace as we know it is changing. Christian Coop, a designer at NBBJ Architects, explains how workspaces are evolving as younger generations become influential. Itâ€™s no secret that offices are continually adapting to cater to individual workspace needs. More companies are moving away from considering the desk a symbol of productivity and JLL estimates 30% of office space will take a co-working format by 2030. They are tapping into new spaces that create a variety of ways of being engaged and connected in the workplace. This lateral thinking gives flexibility to how and where people work and underlines the importance of ripping up the one-size fits all approach.
MILLENNIAL INFLUENCERS Millennials are the most recent group to redefine the workspace landscape. This generation is more vocal about
how design, flexibility and amenities keep employees productive and stimulated. Sustainability is a key driver for millennials too. They are on a mission to make the world a better place by reducing their carbon footprint. This means office spaces that repurpose energy or use recycled materials to create a harmonious environment are preferred.
WORKPLACE TRENDS Millennials are content to work longer hours than previous generations, but work space should feel more like a home and be characterised by a relaxed environment. This creates a sense of individuality within workplaces and depletes the tradition of hierarchy. Itâ€™s no longer as simple as an open
More companies are moving away from considering the desk a symbol of productivity
TECHNOLOGY’S ROLE Technology has been dissolving office boundaries for years, pushing companies to become more transparent with their approaches and internal ethos. With social media at everyone’s fingertips, employees have become a brand’s biggest ambassador. This has emphasised the need to have working environments that support individuals and encourage productivity and positivity.
FACILITATE COLLABORATION AND CHANGE It’s important for companies to facilitate this change in order to get the best out of their employees. Collaboration is key in driving companies forward and it’s now recognised that workspaces are vital in encouraging this.
MEASURE SUCCESS Technology is playing a key role in enabling employers to measure the success of office environments. NBBJ has developed a tool that can gather data and provide insight into multiple qualities inside an office environment: light levels, showing the lightest and darkest spaces; noise levels, identifying the quietest and busiest areas; even air pressure. This tool is connected to a smartphone app, where employers and employees can instantly identify the area of the office that suits their working needs. This equips employers with the tools to analyse what spaces are working best, as well as an understanding of the spaces in which their employees prefer to work.
Five things to consider when building a co-working space
01 02 03 04 05
TECHNOLOGY HAS BEEN DISSOLVING OFFICE BOUNDARIES FOR YEARS
A SENSE OF PLACE Like a public square or village hall, there needs to be a meeting point where employees can come together and share stories
VISITORS Guests are key to achieving perspective. Create a space that reflects your values where visitors can feel welcome
CHARACTER An office needs identity and interest. Create spaces that offer various experiences: for example quiet, collaborative and leisure spaces
CHANGE Be flexible and change with the times. Always assess your workplace and identify if it still fits the needs of employees
HOME Employees need to feel comfortable and relaxed. Bringing a sense of home can blur the lines between work and home life
05 hive - OFFICE FOCUS
or closed plan office; these are merely two ends of the extreme. Workspaces actually need a mixture of both to be successful. Property developers are catching up quickly to these office design demands with mixed-use developments that allow companies and residents to cross paths. The days of the central-core office block are numbered.
hive - HOWARD CAPITAL
is key Howard Capital has made real progress in the first half of 2017.
In the last issue of The Hive, finance director Huw Jones outlined the Group’s five year capital strategy. Howard Group provides patient capital in flexible structures, with a timely decision making process. As the second quarter of 2017 comes to a close, Huw reflects on progress made to date.
says Huw. “We’ve been able to use our relationships in our community to secure key partnerships that reflect our intent and values as a business.”
STRONG START Having spent the latter part of 2016 establishing its five year masterplan, the execution of the capital strategy is now well underway. With a deal completed in professional services technology and a partnership with seed investors IQ Capital secured, the Group has demonstrated its intent. “Our strategy has gone beyond an idea and is fully operational. It’s a part of what we do as a Group,”
We want to invest in those looking to bolster our region's economy
With its talented workforce and knowledge-rich start up environment, Cambridge is an inspiring place. “There are lots of people with exciting ideas who need support to bring these to life. There’s a dynamism in Cambridge that comes from the extraordinary talent pool that operates in and around our city,” he continues. It has meant there are plenty of opportunities for Howard Group to activate its new strategy. The Group will continue operating primarily as a property development and investment business. Its investment in technology and early stage businesses will complement this.
“Property will always be our strength. At the same time we’re working alongside key partners on the capital side of our business to ensure we’re making sound investments.”
BUILDING CREDIBILITY Establishing a reputation for sound investment is not built overnight. Howard Group has worked hard to build appropriate relationships throughout its history to inform and influence the investment decisions it’s making today. “We are serious about our approach to investment. We’re connected to the right people and are making decisions with confidence. It’s important to us to be visible and communicate that we have moved beyond aspiration now and are actively supporting new businesses.”
Through its subsidiary Rephine, iX maintains a library of audits on pharmaceutical companies based both in Europe and the Far East. Howard Group has been an investor since 2005.
Innovative networking software Pekama is designed to connect intellectual property lawyers to effectively match skills to individual cases. Howard Group’s funding is part of a third round investment.
Howard Group has become a limited partner in IQ Capital’s second fund. The private equity group has received significant capital that will be invested over the next three years in tech start up businesses.
hive - HOWARD CAPITAL
There’s something about Cambridge... CAMBRIDGE’S TECHNOLOGY SECTOR HAS GARNERED INVESTOR ATTENTION FROM ALL CORNERS OF THE GLOBE SINCE THE 1970s. BUT HOW DID IT BECOME SUCH A SUREFIRE BET? IQ CAPITAL’S MAX BAUTIN CONSIDERS THE FACTORS AND LOOKS TO THE FUTURE.
Cambridge has been a centre of academic excellence for over 800 years. The university is currently ranked third globally for the number of Nobel Prizes it's clutching; quite the accolade for a one-time small 12th century market town. While its educational prowess has never been in doubt, it wasn’t until the 1970s that it began to be commercialised. “The academic and commercial worlds never collided until the mid 20th century,” explains Max. Trinity College and St John's attempted to address it with the launch of Cambridge Science Park as a place for the academic and commercial worlds to come together. “There are now 4,500 technology companies within 20 square miles of Cambridge experiencing a growth rate of 7.8% per annum. It’s expanding at an astonishing rate.”
In the last six years, $47bn worth of exits have been generated from Cambridge technology businesses including giants such as ARM, Domino and a myriad of smaller deals from VocallQ (Apple/Siri) and Phonetic Arts (Google). The business world knows Cambridge’s worth even if the government doesn’t.”Cambridge's tech cluster is growing faster than China in terms of GDP,” says Max. One factor contributing to the exponential growth is the agility of new start ups. “In the 70s and 80s you needed a computer to start a business and they cost so much you couldn’t get your feet off the ground without a massive investment. Advances in technology have made the boom possible and created a diverse ecosystem of businesses capable of rapid growth.” So, what of the future? If Cambridge can sustain the pace
MAX AND HIS TEAM HAVE BEEN WORKING IN CAMBRIDGE FOR 20 YEARS
There are 4,500 technology companies within 20 square miles of Cambridge
of growth it will cement its place as Europe's Silicon Valley and become as big as the city in terms of its impact on the UK's GDP and contribution to the public purse. Brexit may be a fly in the ointment, but a relatively small one according to Max. “The tech talent pool is very European – around 50% of those in the tech industry are from Europe, but technology is global and this will help to insulate Cambridge from the ecomonic impact.“ Funding is a different matter though. With the European Investment Fund currently bolstering a large proportion of investment in the UK, these great minds may look elsewhere to settle. “If entrepreneurs can’t get access to funding, they may look to locate to other European cities such as Dublin, Paris and Berlin where they can collect the capital to evolve.”
hive - THE BUZZ
THANK YOU and goodbye
All the latest activity in and around the Howard Group community.
In March long-standing non-executive director Andrew Slipper stepped down from his role on our board. Throughout his 15 years' involvement with the Group, Andrew has served on the ventures, HPG development, investments and CAEC Howard Properties boards. We are extremely grateful to him for his professionalism, dedication and wise counsel over the years. Andrew’s contribution to Howard Group has been outstanding and we will miss him greatly.
Howard Group sleeps rough for YMCA
PROPERTY ASSISTANT Howard Group has strengthened its team over the last year as it continues to grow its presence in Cambridge and the wider region. Through this expansion, and the need to bolster the team in a number of key areas, Laura Mills joined the team as property assistant in April 2016. Laura works in the property team supporting the property administrator. She assists in all aspects of the management of Howard Group properties, as well as ensuring the smooth running of the administration of the property and development teams. Over the past year Laura has been able to take a more active role, and has become involved in the residential lettings business liaising with tenants and suppliers.
THE TEAM SPENT THE NIGHT OUTSIDE The team at Howard Group took to the streets to sleep in the cold at this year’s YMCA Cambridge Sleep Easy event at St Catharine’s College in March. The event spreads awareness of sleeping rough, whilst raising funds to support young people to rebuild their lives. Six staff took part including Nicholas Bewes, William Jewson, Simon Messervy, Will Banks, Robin Lea and Magda Swierczynska. The business raised over £3,000 towards the charity’s overall goal of raising £1m for YMCA services. Thank you to our many friends who supported this valuable cause.