Fees and trees
I’ve been on leave for a few days, hence no full edition of Futures /Cut this evening. However, over the course of a few days at a well-known UK forest-based resort, I’ve reflected on a couple of things that I thought were worth sharing.
The first was that more than 50% of my bill on leaving was for services (food and ‘experiences’) as opposed to real estate (lodge) costs. The operator’s ability to charge these rested on two factors. For a start the experiences had to be things that I would find enjoyable and convenient. This comes through having a good knowledge of one’s customers. The other factor is that it had to be inconvenient to leave the site in search of better experiences (in this case a 15 min walk to a difficult to find car park and no public transport options or nearby facilities). For owners of large campus type assets, keeping profitable services from leaking off your campus is an important consideration. As a real estate investor who spends money on placemaking, why let other operators take a free ride on the back of your efforts?
The second is the value of nature in placemaking. If you took away the trees, this resort would have looked like a mix between ‘Maplins’ holiday camp and an army barracks. With forest in place, you could have been in a Canadian idyll. I don’t sense that the value of nature has been fully factored by real estate developers (or at least this isn’t manifesting itself in the planting of sufficient trees). An example of where this has been done well was Milton Keynes. Designated as a New Town in 1967, starting from effectively a blank sheet of paper, great placemaking was essential to its success. To achieve this the Development Company planted over a million trees in the course of the first couple of years, and since then a further 21 million. A tree typically costs in the order of £1 to plant and takes 15 years to achieve maturity. Only 13% of the UK has woodland coverage, and the need to plant trees to lock up carbon and ameliorate pollution is only going to increase. Beyond doing good for the environment however, the inherent value of trees increases over time, as does the value that they confer on surrounding properties. Win on both accounts and plant a tree today!