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Since her appointment as London development director at Land Securities in 2006, Colette O鈥橲hea has been one of the most powerful clients in construction. Now promoted to managing director of London for the 拢12bn property giant, she is overseeing the delivery of a 拢1.5bn programme of development, all to be complete before the end of 2016, by some of the industry鈥檚 elite contractors
鈥� including Mace, Skanska and Lend Lease.

Not content with that challenge, O鈥橲hea will this summer take on the presidency of the British Council for Offices (BCO). As the pace of the economic recovery quickens with office development activity at its highest level since 2008, she is set on using this platform to ask the development industry some tough questions about its focus on its ultimate client 鈥� the firms who occupy its buildings.

O鈥橲hea and Land Securities set out a very clear view of the kind of accommodation post-recession occupiers are looking for. But she鈥檚 not sure the industry as a whole can honestly say it develops and builds on the basis of an in-depth understanding of its customers. In London, this apparent lack of focus is being exacerbated by the heating up of the construction market, which itself is causing rising prices, safety concerns
and an unsettling level of staff movement. So how is Land Securities approaching this, and what lessons does construction need to learn from other industries?

Land Securities was virtually the first major developer to return to the market post recession, restarting work on a wave of projects in 2010, including its most high-profile, 20 Fenchurch Street, better known as the Walkie Talkie.

Essex-born O鈥橲hea is clearly pretty pleased with this decision, which will see the developer complete a range of schemes over the next couple of years as the lettings market heats up. 鈥淲e鈥檙e in a good place in London. Everything is pretty much playing out as we鈥檇 anticipated,鈥� she says.

Just two of Land Securities鈥� pipeline of projects are yet to have a contractor appointed 鈥� although O鈥橲hea says the firm is close to decisions on these, the 90,000ft2 Oriana retail scheme and 95,000ft2 20 Eastbourne Terrace office project.

Beyond 2016 it has no development pipeline and is pretty much out of the market for new opportunities: 鈥淲e鈥檙e not buying at the moment because it鈥檚 a very hot investment market. There鈥檚 a real demand for development land, [but] there鈥檚 only a finite amount of product,鈥� says O鈥橲hea. 鈥淭here are a lot of people piling in to it at the minute and we鈥檙e not going to compete at the levels that we鈥檙e seeing.鈥�

This leaves her with little procurement to undertake right now, something else she鈥檚 pleased about. 鈥淲e have seen rents rising, but in parallel we have seen construction costs rising. It鈥檚 a collision of the residential strain and the commercial strain on the construction industry. That鈥檚 becoming an increasing challenge. And I think some of the big contractors, their order books are almost full.鈥�

Hence her focus is shifting from procurement to delivery of projects. 鈥淲e鈥檙e not sitting here twiddling our thumbs,鈥� she says.

The right price

Land Securities made a conscious decision to procure its current pipeline of work 鈥� including mega schemes such as its 拢384m Nova Victoria project in Victoria, London 鈥� in the teeth of the recession using single stage fixed-price competitive tendering. This allowed it to secure low prices from contractors. But it is undertaking remaining procurements in a very different fashion, using two stage tendering with an element of negotiation, despite this providing challenges for it as a listed company.

鈥淎s a Plc you need to be tendering absolutely everything but that just doesn鈥檛 fit with the market as we see it today,鈥� says O鈥橲hea. 鈥淪o it鈥檚 trying to work out how can we merge the Plc needs with giving someone the certainty that they鈥檒l get the job, provided we can come to the right price. So effectively you鈥檙e negotiating the price. Because what is putting people off at the moment is competitive tendering.鈥�

Indeed the market is now so hot in the central London geography that she works in, that she foresees a return to construction management, despite the pricing risk for clients. She says: 鈥淚f I had a project now and we were looking to procure it, then I suspect CM would be one of the routes we鈥檇 be considering, but it鈥檚 obviously more risky for us [in terms of price].鈥�

However work is procured, it is clear O鈥橲hea thinks the qualities she needs from contractors are all too rare. 鈥淲hat you want is the businesses that are able to merge really traditional contracting with modern technology. Which is actually a really difficult thing to do.

鈥淚t鈥檚 about people who just know building, who can envisage how the thing fits together in their head. That鈥檚 a very special skill. They understand the site; they live and breathe it. When you meld that with cutting edge technology then you鈥檝e got a very powerful combination, [but] I think that鈥檚 where people struggle.鈥�

She won鈥檛 say which firms she thinks offer this, though she says she can be judged by her record 鈥� in recent years Land Securities has offered its prize London jobs to Mace, Skanska, Sir Robert McAlpine and Lend Lease 鈥� though 20 Fenchurch St is being built by Canary Wharf Contractors as Land Securities is partnering with Canary Wharf Group on the development.

A certain quality

The difficulty in finding people with the right skills is not limited to builders, though, with the resurgence in the market creating instability as consultants start to vie for the most talented staff. 鈥淲e鈥檙e back to a place where anybody that is talented within the construction development sector is in demand. Particularly in the construction industry we鈥檙e seeing a lot of shifting between the various businesses.

鈥淲hat that brings as a client is a lot of instability and uncertainty, so that鈥檚 a risk. It鈥檚 very unsettling because you鈥檙e reliant on your teams 鈥� whether they鈥檙e internal or external 鈥� you want the same people round the table. And it鈥檚 all putting pressure on the cost base.鈥�

This feeds in to her wider view of the development industry as a whole not always focusing on its customers. O鈥橲hea speaks articulately and confidently and while you would not describe her as outspoken, she is evidently not frightened of challenging her peers in the development industry to do better.

She says: 鈥淥ne of our customers said to me the other day 鈥榳ho are the architects designing for 鈥� themselves or us?鈥欌��

It鈥檚 a problem O鈥橲hea clearly believes can be applied to architects widely. 鈥淚 think it absolutely is a fair criticism,鈥� she says.

But where does a focus on buildings鈥� occupiers take the industry? O鈥橲hea says the demand, emerging from recession, is still for cost-effective space. But that doesn鈥檛 mean low-spec or cheap 鈥� quite the opposite 鈥� it means optimising the building for maximum possible occupancy and productivity.

鈥淲hat office occupiers are looking at is the cost per head, so then it comes back to the efficiency point,鈥� she says. 鈥淚f you鈥檝e got 20,000ft2 of space, how many people can occupy that space? And actually if you want to optimise that, you do need really high-spec. You can鈥檛 cut back if you want to achieve high densities. It鈥檚 everything from the lifting capacity of the building, to the air handling, to IT infrastructure.

鈥淲e鈥檙e responding to a world where our expectation, that the cost per head would be going down because people would be working from home, actually doesn鈥檛 work. We do want to come in and occupy space, but that space will be used differently.鈥�

She cites both Land Securities鈥� own Walkie Talkie, and Derwent鈥檚 stripped back 鈥淲hite Collar Factory鈥� concept in Old Street as instances where the industry has thought hard about specific users鈥� needs. But this doesn鈥檛 always happen.

Keep the customer satisfied

鈥淚f we as an industry don鈥檛 think about our customer at all times within every segment of it, we won鈥檛 have a sustainable model. There are many other industries that haven鈥檛 kept tabs on what their customers have done and they鈥檝e gone. You look at some of manufacturing, where they are looking and understanding what their customer wants daily. From the widgets, to the colours 鈥� constant customer feedback that is informing their product.

鈥淚 am a customer of a contractor, but the ultimate customer of both contractor and Land Securities is the end user, and so it鈥檚 about the industry remembering that, so that they鈥檝e always got the end user in mind when they鈥檙e building out.鈥�

She seems to have a particular concern here around architects, adding this advice is 鈥渞eally relevant for the design industry鈥�.

Indeed, for her, the current debate over the planned proliferation of tall buildings in London is more a question about the design quality of the proposed towers than their height or specific location.

鈥淟ondon鈥檚 success has been its ability to have historic buildings sitting among beautiful modern buildings. If you鈥檙e working around listed buildings, that absolutely should and must be respected, and viewing corridors are important and should be respected. I don鈥檛 think we鈥檇 be where we are today if our policies around heritage weren鈥檛 working.

鈥淚 wonder whether the biggest challenge is the design quality challenge 鈥� how do you ensure that every building is absolutely of the best quality for whatever its use is?鈥�

O鈥橲hea will have a year at the BCO to develop this theme, after being formally announced as president at the organisation鈥檚 annual general meeting in July. The construction industry would be well advised to listen.

BCO conference

The BCO conference takes place in Birmingham on 14-16 May. For more information or to book a place go to www.bco.org.uk. 黑洞社区 is a media partner for the event.