Locum Destination Review - Issue 20

The journal of record for the global destination industry

Editorial

Here in London, at the hub of the UK and international financial and real estate markets, the credit crunch has bitten and is now chewing and swallowing up businesses and even countries.
Consumers are realising the fun of the “noughties” is truly at the end. The economic cycle has turned away from the exceptional economic growth and real estate activity seen in many markets since 2000. Most mature markets are accustomed to the ups and downs of the economic cycle but other emerging markets less so.

Financial institutions, investors, developer communities and governments are getting to grips with the new landscape, that of significantly reduced capital. It is reasonable to expect that reverberations will be felt in business space occupation, residential demand and consumer spending throughout 2009 and probably for much of 2010. We are in uncertain times.

The emergence of the Middle East and BRICs nations (Brazil, Russia, India and China) and the gradual opening up of the natural resource rich central Asian region is creating more intriguing opportunities. The global economy has been driven for many years by the US, Western Europe and Japan. The emerging new world order is seeing these regions joined by the BRICs and others to diversify and make an increasingly important contribution to world economic growth.

Another story of recent years, in part driven by the emergence of these countries and regions, is the ever greater competition between cities and regions. For example the last decade has seen a particular spurt of what one of our authors terms ‘global destination projects’. Some projects with questionable deliverability, market positioning, sustainability and hazy exit routes are being consigned to the electronic dustbin, no doubt to be dusted down at some point in the future. Others are simply being reviewed with more detailed ‘due diligence’ to establish their market relevance.

Locum has long held the view that within the real estate sector successful destination development requires a journey of creative product development. A feasibility report should not be a point in time document that gathers dust, it should grow, pose questions, provide answers and be a lively process. This process acts as the destination development promoter’s critical friend. The aims should be to understand the promoter’s objectives and to seek to ensure that investment prospects are optimised and a premium return on investment is achieved – whatever the measure.

So what do we mean by creative product development? At Locum we endeavour to break this development journey into 4 sections.

Visioning Destinations – visioning, power of the idea and market analysis;
Developing Destinations – concept & product development;
Investing in Destinations – assessing the investment prospects;
Managing Destinations – ensuring performance is optimised and benchmarked.

As always, we are most grateful to all of our authors, who have responded to these themes in different ways and from different perspectives. Together they provide a wealth of insight into the different stages of our destination journey. In addition, we have included a number of equally insightful articles from our regular in house team at Locum and an update on what the company has been doing.

This edition of the Locum Destination Review offers a framework for operating in a more challenging destination development environment. It illustrates the unique added value of the Locum and Colliers businesses, in the UK and around the world, from strategic planning through to real estate delivery.

I hope that all our readers enjoy this edition of the Locum Destination Review.

Roger Hobkinson
Issue Editor