By Donna Ewen
Derren McRae is Managing Director of commercial property agent CBRE in Aberdeen. The company provides a range of services from acquisitions and disposals to investment advisory, project management, building consultancy, property management, ratings, and also has a sizeable facilities management business. Derren’s primary focus is transaction and advisory services, which is largely the acquisition and disposal of commercial properties. He is by all accounts the maestro of Aberdeen Monopoly board game… And when it comes to putting the principle of the game into practice, he aims to pass ‘Go’ every day!
ABN: What is your background and how long have you been involved with CBRE?
Derren: I have been with CBRE for the past 10 years. I attended Robert Gordon’s College and the University of Aberdeen where I studied Land Economy. I went to work at FG Burnett and worked there for numerous years in the rating department, where one of my Uni friends also worked. It was enjoyable times and then moved to work under Richard Noble on the retail side, so widened my experience. From there I made the decision to work in the central belt so headed for Glasgow and worked for a company called, Culverwell, where I worked for several years.
ABN: Did you always know this was the path you wanted to follow for your career?
Derren: Not initially. At the time I didn’t really know what a surveyor actually did. It was only when I got proper work-experience I actually realised what the role of a property advisor does. I was fortunate enough to get a couple of summer’s working for Paul Gee & Co. CBRE had an association with Paul Gee & Co in Aberdeen and ultimately acquired the business in 2008. When I was offered the opportunity to work for CBRE, I left Glasgow and came home. What I took away with me from my time in Glasgow was the contacts I had made during that time. I was encouraged to go to London every other month to meet clients. I built up a strong network of contacts. It was great to get away for a few years and just absorb the experience of living in a different city. Being encouraged to go to as many cities throughout the UK, gave me a greater insight so when I came home, I had bigger, better ideas as to what I thought would work well. Paul had a vision for me that one day I would be managing director for the Aberdeen business. It went full circle for me from those earlier days of summertime work experience.
ABN: How old were you when you were told you were managing director material?
Derren: I would have been 30-years-old, but I wasn’t told straight away that was the intention. It was a slow progression over time. I had always had a very good relationship with Paul Gee and I guess he had that succession plan in place for when he was ready to move on. There was also a link back to CBRE with one of the directors I had worked with during my time in Glasgow.
ABN: Can you give me an overview of CBRE (for example, what services you provide) and what do you specifically oversee?
Derren: CBRE are a large global firm of commercial property advisors. They are a considerable size. We are not an affiliate, but the Aberdeen office provides a full range of services. The sector I specialise in is the transaction and advisory services, which is largely the acquisition of commercial properties. We oversee all aspects of property from the industrial, office, quite a bit with retail and leisure as well as larger residential site sales. We now have a specialist residential investment advisor, Gordon Pirie. It’s called Private Rented Sector (PRS) – which is a relatively new sector to the UK market. Dandara has been leading on this sector in Aberdeen, firstly with Forbes Place at Stoneywood and they are also currently building out The Point in the former Triple Kirks. Gordon is now heading up that sector across Scotland. It’s certainly a growing, institutional product across the UK. We also have department heads for each of the other services we provide.
ABN: Do you ever stop to think this is scary, or do you just take it all in your stride?
Derren: I’m Aberdonian, so I just get my head down and get on with it!
ABN: Are people surprised when they discover you are a managing director?
Derren: I had an incident last week where I was speaking to a potential new client, she did question my age, so yes, on the odd occasion I come up against that sort of thing. I turned 40 this year so I was pleased to reach a landmark birthday for that very reason. I’m beginning to feel my age! Being a property agent is quite a young man’s game, so it’s all good. As a business, we encourage young people to come on board. The world is changing so fast with technology so I am always ready to learn and do, from the younger people who have grown up with computers, who now work in the office. Apps especially seems so much more natural to the younger staff. We all have to embrace it as that is the way of the world now, but I also learn something new every day from older colleagues. CBRE always encourages everyone to have their say, and I am always open to learning.
ABN: What is your work ethos?
Derren: I like to think of myself as hard-working. My dad ran his own construction business and he always drilled it into me the importance of working hard. He worked to tight time-scales to get projects completed on time, so it feels natural to me to be the same. It’s something I have just grown up with. The best bit of advice my dad ever gave me was to readily accept constructive criticism, don’t take it to heart, learn from it. People have to say about certain projects how they have gone, so learn from each project, so you can take it to the next level. At the end of the day, every day is a learning day.
ABN: What’s your unique selling point?
Derren: The business has really made a huge drive on occupiers. For example, we are now in a position where we can go and acquire a new headquarters’ building for an occupier, we can offer to carry out a workplace study of how they work day to day as a business, we can put our facilities management team in so we can look after your building. We offer a complete bespoke package. Also, because of the global spread of the business, it doesn’t necessarily have to be here in Aberdeen, we can put people in touch with any of our offices throughout the world. We offer all these services in any location.
ABN: What is your prediction for the property market in 2020?
Derren: I think since the oil price drop there has been a few challenging years in Aberdeen since it took a downturn in 2015. We will have the take-up stats by year-end and I am happy to say it is looking like it will be the best in terms of take ups since the oil price drop. Its very encouraging and definitely on the up. The reality is there is still a good level of high-quality buildings on the market. It’s a good time for occupiers to make that move… an opportunity to improve your accommodation. People have been historically paying high rents for poorer quality buildings, but now they are able to move to fantastic facilities that are out there on the market. It’s a very good time to be looking as an occupier.
ABN: How has the business developed into what it is today?
Derren: Largely, I would say it is down to the range of services we provide. There was probably a point where we were just purely focused on the transaction and advisory piece. Now, we have managed to bolt on new service lines for the Aberdeen business, so I guess it is strength and depth with the team we have in the Aberdeen office. To give an example, the facilities management side of the business has grown significantly. CBRE acquired a UK company called Norland a number of years ago and also Johnson Controls global facilities business and we now have 120 employees based on clients building facilities headed up by my colleague John Sinclair. You will now walk into major occupiers and be met by a member of CBRE employee at reception as well as looking after the buildings.
ABN: Is there anything you haven’t yet tapped in to, that you plan to?
Derren: There is a change of focus now on the investment side with our residential investment offering. We are the first firm to have someone in Scotland to specialise in this sector of the market. That is something that will continue to grow. The reason it is happening is down to following trends. If you go to Manchester there are a number of PRS (private rented sector) developments coming out the ground so effectively a developer will build a block of flats, keep control of them all. You will not be able to buy them individually. The developer will then sell the completed block on to an institutional fund while retaining a management role in making sure the building is both let out and properly factored, so it’s amazing to go and see some of the UK cities such as Birmingham and see cranes across the whole city purely focussed on PRS. You will start to see it happening in Glasgow now where for example Aberdeen developer Drum Property Group are on site, which is a really growing part of the market.
ABN: Is this the alternative for the younger generations who cannot afford to buy?
Derren: Yes, it is just the way the world is now. People just basically want an easy life. You are effectively getting a bill at the end of the month which incorporates rent, council tax, service charges, utility costs. Should a lightbulb go off in the hallway, you would simply send a message via an app and it will be repaired the following day. No need to be falling out with a neighbour. It’s all about convenient living. I would compare it to the motor trade in the same respect you don’t necessarily want to own a car. I guess its just the new modern living lifestyle choice. The positive side of it is you may just be a graduate and can only afford a basement or studio flat, but once you get a pay increase you can move on up. It’s all about the ease of improving your living standards and it eradicates rogue landlords. It is already big in both America and Germany, and now it is here in the UK.
ABN: Do you manage to strike the right balance between work and life?
Derren: (laughs) I would like to think so, but you would probably best ask either my wife or my colleagues. Since I became a dad to our son, Ellis, two years ago, that put me in the right direction. I always aim to get home in time to read him his bedtime story. Baby number two is arriving in April, so I really do try to strike the balance… nowadays! I still check in with work on a daily basis, it’s the modern world so I always have to be aware of what is going on with things like social media. That’s just life at the end of the day. My wife always has the final say.
ABN: Can you provide details of staff numbers, location and products?
Derren: We are located in the west end. The part of the business I am involved in we have 13 staff in our office. In the facilities management side, which whilst I am not personally involved with, we do work collaboratively with the team where they have 120 staff out in client facilities across Aberdeen. Collectively, there are around 140 people working for CBRE in Aberdeen. We also have building managers based at The Capitol Building and Marischal Square, those are the ones our property management team look after. We are in all the right places, with a good quality book of instructions and developments we look after.
ABN: Tell us about a day in the life of a managing director?
Derren: What I have always enjoyed most about working in the property industry is that no two days are ever the same. It’s encouraging not to be sat at a desk all day. One day I could be helping to launch a client’s new building, the next day, I could be jumping on a plane down to go see a client somewhere in the UK, or on the odd occasion, abroad. It’s always varied and it is good to get to meet a whole host of different people. It is very much a people’s business. I appreciate a lot of work is done through emails, but for me, getting out and meeting people, face to face, is so much better.
ABN: You strike me as a pretty unassuming guy, what keeps you grounded?
Derren: I think clients, colleagues and of course my family keep my mind focussed and every day is a learning experience. I appreciate and accept I don’t know everything, nor do I have all the answers.
ABN: What has been your proudest achievement to date?
Derren: To see the developments I have been involved in, in a transaction, even walking down the street, passing a building I have had an involvement in is good as it brings the memory back to how I inputted in the process. I guess the most recent one for me has to be Marischal Square as there was a bit of controversy around the whole development, initially. What has been great to see is those people now actually come up and say, ‘actually I really like it’. Seeing the end product and how people like it and to see so many good companies now sign up to move in. The location and quality of the development is a testament to a job well done. Both Muse and Aberdeen City Council have delivered. It’s great to see how that part of the city has been regenerated as a result of it. We advised Muse on the funding deal with the council. A number of our services have been involved from planning, to the letting of the hotel, offices as well as the retail units as well as now managing the development on behalf of the council.
ABN: Is there any one property that you are especially proud of?
Derren: Not that one specific one comes to mind. I guess Aberdeen has changed so much. I think it’s great to see so many good quality commercial developments now in place. I know for a fact, colleagues in the central belt were amazed by the relatively poor product that was only previously available in Aberdeen, but now it has changed. We have proper transport infrastructure in terms of the AWPR, TECA, The Art Gallery, the expansion of the harbour. I am simply a proud Aberdonian and it has been great to see all these different developments take place.
ABN: Who are on your clients list?
Derren: We have an involvement in a number of buildings and developments across the city. On the letting side, we have Marischal Square, we are advising on The Silver Fin Building on Union Street, the IQ Building on Justice Mill Lane. We are advising Patrizia on the proposed Merchant Building development which was the former BHS on Union Street and Market Street. The building will not be turned in to flats. Just like Marischal Square the evidence is there that there is an appetite for good quality office space in the heart of the city centre, which is the preferred route for the developer at this point. As has happened with Marischal Square, there is a real drive around the public’s experience, giving back some ground for public realm for the city which is critical so you can expect to see similar leisure outlets on the ground floor while the upper floors will provide office space – which will to provide great views across the city.
ABN: What has been the biggest challenge you have had to face so far in your career?
Derren: Dealing with the consequences of the oil price drop. At the time, the key driver for the business in Aberdeen was looking to acquire new space for generally energy sector companies. With the lead time, by the point the buildings actually came out the ground and built, we found the market had completely changed, so by the time some of these buildings had been completed, we had to shift our focus to advising occupiers on how to dispose of some of their new space. I’m pleased to say we have been able to dispose of a large percentage of this surplus space – which is encouraging.
ABN: Where will the company be in five years time?
Derren: The business – across the board is really investing heavily in technology. There is a lot of money being put into a variety of tech initiates and apps that we can offer clients on real estate solutions and platforms. Certainly, on the property side of the business, they have already implemented the use of apps. The tech side of things also looks at clients’ data, in the way, algorithms work, how the buildings could be used better. CBRE has acquired a variety of tech companies which capture all manners of data for the property sector and how we can then help clients make good decisions on their real estate.
ABN: What is the most satisfying part of your job?
Derren: Every day of the week I see projects I have been involved with and to see them through from start to finish is for me, truly satisfying. Whether going out to see a client who has moved into a new building or even going to eat in a restaurant I have been involved in letting, we are lucky in that we can actually see what we have done and the impact some of these transactions have made. It’s good to see people across the city, interacting and using these buildings or projects we have been involved with.
ABN: Describe your favourite day?
Derren: The end of year Christmas party! December is pretty frenetic in terms of trying to get year-end transactions over the line, so it can be pretty manic. We have our festive gathering on the last Friday of the month, so it’s a good time for us to celebrate. A ‘well done’ to everyone for their collective efforts throughout the year. My favourite day off also includes catching up with my friends and family.
ABN: Do you have any resolutions for new year?
Derren: Keep on, with what we have been doing. I think it is important that everyone talks the city up. There is a lot of great things happened and are happening. I think we have all been guilty of being complacent with the way the city was and has been, but now we all need to work together and start talking the place up. Hats off to the various organisations out there that are trying to drive forward diversification and to the future, looking beyond oil and gas.
ABN: What leisure pursuits do you enjoy away from the office?
Derren: Well, that has changed somewhat since I had my wee boy. The majority of my time is now based around my son. I enjoy attending the odd Cove Rangers or Aberdeen football game. I tested the water playing golf, but the golf clubs have most definitely been put on the back burner as it was just too frustrating. They now have cobwebs growing around them!