Like me, you will no doubt have been bombarded in recent months with lots of coronavirus insights from various professionals, trying their best to advise on what has been a rapidly changing picture and furiously polishing their crystal balls in order to have a stab at predicting how the world will change in the coming months and years.
I’m not going to put on a dark wig and call myself Mystic Meg, so don’t worry. However, I am certainly sensing that change is coming for landed estates, but that change is not necessarily a bad thing.
What do landed estate clients predict?
Over the course of lockdown and the continued presence of coronavirus, I have been actively speaking to landed estate clients – principals, trustees and agents – about what they see as the changes coming that they will have to adapt to or, in some cases, embrace. Most of them have been around for centuries and have survived war, famine and even pestilence before.
The majority will also likely be around for centuries more to come, so their longer-term approaches are often a good guide of what might be to come for other parts of the rural and the wider economy.
In recent (pre-COVID-19) years, landed estates have, as a sector, clearly moved towards a more commercialised approach; with the driver often being a succession where a new principal has worked in a professional role or has run their own successful business.
They of course respect the history of their lineage, and their privileged position in being the latest custodian of a grand house and/or estate, but they see the estate far more as a business than perhaps did earlier generations.
The shape of things to come
That said, in virtually all cases, the changes clients anticipate do not represent fundamental or dramatic shifts to their current structures or models of operation: For example, many recognised some time ago that office and retail investments may be losing their shine, as home-based, agile working was becoming increasingly common and as traditional retailers focus more on their online space, as opposed to their shop space.
Clients I have spoken to always knew this was coming, but now (rightly, in my opinion) expect the pace of that shift to accelerate significantly, as businesses emerge from the pandemic with leaner more agile workforces.
This will lead some to reconsider investments in such space, or to reassess how such space will work in the near future: My feeling is that many professional services businesses will reduce office space to, eventually, a “hub” with a reception, meeting rooms and one open work space, with most staff working out of the office most of the time, and many more internal meetings done by Zoom or Teams.
Many estates have also recognised the importance of working long-term with tenant farmers to increase productivity and to add value to agricultural land due to a more motivated tenant, rather than simply chasing the highest rents for short-term lets.
Again, it is not the concept that is new here, but rather the pace at which this change may occur. COVID-19 has demonstrated how the domestic food supply chain is essential and has created a new army of consumers devoted to local, sustainable produce.
In my local market town, the independent butcher and the greengrocer have never been so busy – again, consumers did appear to be turning back to smaller outlets, and favouring locally-sourced produce, but the rapid pace of change during lockdown has been remarkable.
Intuitive advice adds value
Finally (and I declare an interest here!) landed estates, like any other business, are also watching their cashflow – cash is, after all, king. Whilst some are looking at staffing levels (depending on the nature of estate diversification and in-house businesses) others are inevitably looking at “soft-spend” such as the annual sums they pay for legal and accountancy advice.
Traditionally, landed estates have often been wedded to particular advisors for years, or even decades. This was usually because the firm in question had a long-term advisor who knew the estate better than many others, including complicated trust and Settled Land matters.
Again, there has been a gradual shift away from that position – Muckle LLP has benefitted from it. Since the establishment of the Agriculture Team in March 2018, we have signed up numerous landed estates as clients.
As with other factors, I certainly sense an acceleration in clients questioning whether the advisors they have traditionally used now represent good value for money or, perhaps more to the point, questioning if an advisor genuinely adds value to the estate, through proactive working and a genuine interest in helping develop the estate’s strategy in an ever-changing world.