British Council's Richard Kauntze

The British are coming, and they’re carrying an arsenal of voluntary standards for a range of property issues. They’re coming this May, to be specific, when the British Council for Offices comes to town for its first North American Conference, to be held at the Waldorf-Astoria May 2 through 4. The BCO isn’t a household name in the States, admits chief executive Richard Kauntze, who sat down with GlobeSt.com during Mipim in Cannes. And yet its 1,300-member organization boasts some of the most recognizable real estate names on both sides of the pond–including Hines, British Land and Tishman Speyer–as well as corporate tenants such as IBM, Goldman Sachs and PricewaterhouseCoopers. Kauntze explains that the point of the US invasion is three-fold: to raise the group’s low US profile, to spread its word of best practices in such areas a green building and post-occupancy evaluations and to open a more regular and ongoing dialog with stateside practitioners. Given the nature of the BCO agenda, the dialog could be a win/win.

GlobeSt.com: There are a number of interesting points to your overall platform. But a lot of your activity is tied into the creation of building standards, correct?

Kauntze: The BCO’s reputation is anchored around the production of what is universally accepted as definitive guidance on design and construction issues. It started off 12 or 14 years ago with what was called the BCO Specification. It’s a benchmark standard for the office shell in terms of floor loading and engineering. It’s a serious piece of guidance, now in its fourth edition, designed to set the standard for what is sensible and economic. It was supplemented a few years ago with a guide for fit-out. And we are also coming out with guides on post-occupancy evaluation and security. By the way, all of our standards are written by our members, who represent a huge wealth of intellectual capital that we use to produce work we feel will benefit our association and the broader market.

GlobeSt.com: What drove the new green-building standard?

Kauntze: Last November we published a guide to environmental management within offices. The world is at a tipping point, and globally there is an understanding in both the advanced Western economies and the developing world that we’re on the cusp of something, and we have to understand our responsibility here. Both of our countries have gotten rich over the years by exploiting natural resources, often the resources of other countries. The world can only take so much.

In the US there is a political change taking place–a profound change–which will lead to all sorts of interesting policy decisions. Certainly in the UK all political parties already see green-sustainability issues as their top political priority. They’re trying to out-green each other. I think this is one of those issues where the UK market can teach the US market.

GlobeSt.com: And what can you learn from the US market?

Kauntze: There are all sorts of things we can learn from the US market, and not just in terms of green. The service culture in New York is still ahead of London, as is delivering a product on time with all contractors understanding what needs to be done. There is a lot of waste in UK contracting. We’ve gotten better but the US market and the trades in particular have a pride in ownership that we don’t really have.

In the UK new office buildings are finished to what is called Category A, in which a spec office will be built and each floor will have a basic fit-out, with a suspended ceiling and basic lighting. What generally happens is that the individual occupiers will rip it all out and do it all again. It’s incredibly wasteful. We have a campaign running to encourage developers to finish only to shell-and-core so tenants can come in and just do what they like. The savings could amount very quickly to hundreds of millions of pounds.

GlobeSt.com: Concerning other issues, you’ve said that, despite the promises, once a lease is signed most real estate companies disconnect from the tenants. Explain, please.

Kauntze: Certainly in the UK there is a disconnect once the tenant has moved in. In the UK market, they use brokers to find tenants and when the tenant is in they use brokers to manage the tenants. That often is where service falls down. Particularly smaller tenants can be frustrated because they aren’t getting the service they expect. There’s been great improvement but there’s a long way to go before owners and their brokers are assuring their customers are in the center of the debate.

GlobeSt.com: And the US manages this situation better?

Kauntze: Traditionally property companies have not been household names. With REITs here since the beginning of the year there is a much more obvious sense of recognition between the ownership company and the services they are delivering. REITs will generate broader recognition for property owners and the product will gain a greater sense of brand loyalty. The sexy end of the deal is doing the deal itself. When the tenant is in the building, it is seen as low value.

GlobeSt.com: And how do you see the BCO participating in the process?

Kauntze: We have a real responsibility to help that process along. The great advantage we have is that no one has to belong. Our members join because they value and believe in what we do. They feel they can learn something and they feel they can contribute and make a difference to make a better environment. It’s our job to help them.