The Big Interview: Stephen Lewis, MD at HFD Property Group

As a youngster, Stephen Lewis was intrigued by a visitor to the family home, who drove a flashy set of wheels and was snappily dressed.

Stephen Lewis, managing director of HFD Property Group, is also a member of the British Council for Offices committee in Scotland. Picture: John Devlin

“More importantly, he was really happy and he had a big smile on his face. And he bounced into the house, did his little inspection and bounced back out. I remember saying to my dad ‘what does he do’, and he told me he was a surveyor.”

The visitor proved a pivotal influence on Lewis, who studied to be a surveyor and is now MD at HFD Property Group, the property-development division of HFD Group. The parent company this year celebrates its 30th anniversary and includes property construction, management and investment.

The group has delivered more than 2.8 million square feet of commercial property across Scotland for occupiers including blue-chip firms, and now serves more than 330 companies, employing 15,000 staff across its mainly office-led portfolio.

Its sites include Strathclyde Business Park, where HFD is based, in Bellshill. The park is home to more than 240 companies with about 6,300 employees.

There is also HFD’s high-end office space at Bothwell Exchange in Glasgow city centre, with its first phase at 122 Waterloo Street covering 155,000 sq ft and let to Morgan Stanley. The second phase, at 177 Bothwell Street (304,000 sq ft), occupies the former site of a Holiday Inn, is to house the new headquarters of Clydesdale Bank – which is to be rebranded Virgin Money – and includes a running track on the roof. The bank will take 40 per cent of the development, which is scheduled to complete in the second quarter of 2021.

Elsewhere in the Central Belt is Hamilton International Park, which covers 1.3 million sq ft and houses 6,300 staff across 80 companies including John Lewis, HSBC, and Babcock Rail. The park is also home to EcoCampus, billed as the UK’s first speculative carbon-neutral office development, whose features such as electric car charging points and 100 cycle spaces harnessed some of Lloyds Banking Group’s £1 billion Green Lending initiative.

EcoCampus was let to the University of the West of Scotland, the institution where Lewis completed his sandwich degree that entailed a year out working for Scottish Enterprise Grampian.

He returned to the organisation on graduating, but after three years decided to relocate to the Central Belt. He was approached to join global property services and investment management company Colliers, which provided him with business and science park experience, and he was then “tapped on the shoulder” to rejoin Scottish Enterprise, but this time in Lanarkshire.

He was involved in the early days of regeneration programme Clyde Gateway and exposure to enterprise zones, later moving to HFD, where he has now been for about a decade.

The firm’s developments in the intervening years also include CityPark1 Aberdeen, a 215,000 sq ft grade A office space development that completed in 2016 and let to energy services heavyweight Wood.

The scheme is known as Sir Ian Wood House, after its former chairman, and Lewis says it is the group’s main office in Aberdeen and consolidated seven sites in one building. “It was the first time ever they could have whole teams on a single floor,” he says. “It’s been a great development for us.”

The venture saw HFD secure a ten-year funding package worth £54 million from Bank of Scotland’s commercial real estate team through its partnership with Scottish Widows.

Lewis also works with the British Council for Offices (BCO), which was set up in 1990 to research, develop and communicate best practice in all aspects of the sector. He has been a member for more than ten years but his active involvement started with the role of judge in the BCO awards process for the regional category of best office developments in Scotland. He then moved to the national judging panel, which gives him sight of the best office developments throughout the UK.

Buildings in Scotland to have been celebrated at BCO’s 2018 awards include Standard Life Aberdeen for its premises in Edinburgh’s St Andrew Square, The Silver Fin Building in Aberdeen and Itison House in Glasgow.

And in 2017, praise was given to 5 Advocate’s Close in Edinburgh, which employed some Victorian construction techniques. Lewis at the time praised the property’s sensitivity to its history “and the new building now has its own story to tell, thanks to the equally innovative and traditional skills required to bring it to life”.

But he is keen to stress that rather than an architectural competition, the awards are “absolutely about promoting excellence in offices” whether that’s the development itself, how it’s funded, or the sustainability and innovation that sit behind it, for example.

The MD is now also a member of the 12-strong BCO committee in Scotland, which works to distribute resources to its membership. He is also immersed in a couple of side projects, such as looking at how to leverage the detailed information the organisation has collected over years – that reveals, say, trends – and how to feed it back to the BCO’s membership.

He has during his career seen a “fundamental” and welcome change in the office sector. Sustainability was a key buzzword ten years ago – HFD built what it describes as Scotland’s first A-rated Energy Performance Certificate (EPC) building in 2008 – NG Bailey’s HQ at Strathclyde Business Park – “and that’s when EPCs were pretty well unheard of at that point”.

More recently, the so-called “war for talent”, which has been stifling companies’ ability to both attract and retain staff, is also having an impact. New research undertaken by Be The Business, a campaign to boost business performance, found that 62 per cent of businesses reported that they struggled to recruit suitable staff, and 40 per cent had lost staff that would like to have kept.

Younger workers will choose a company with the right office environment for them, in the right place, Lewis explains – and that is manifesting itself with a focus on wellness.

The BCO has completed a major research study into the topic, saying successful intervention throughout a building’s life cycle can lead to “greater income retention for investors, and healthier, happier staff for occupiers who will gain from better recruitment and retention”.

Lewis states: “Giving people the right environment to work in means you will get more productivity – and ultimately that’s a benefit to the employer, not just the employee.”

Key considerations include not just suitable levels of natural light and the availability of informal meeting and breakout areas, but the growing importance of IT infrastructure and connectivity. HFD has also highlighted how 177 Bothwell Street was the first development in Scotland to be accredited with a Platinum WiredScore Certification

HFD also boasts Fortis Data Centre, which sits directly off the M8, and the firm provides relevant services to its occupiers.

But HFD – which regarding CityPark2 has consent to develop 100,000 sq ft with the option for a further 60,000 – is operating in a sector seeing dwindling supply of suitable commercial property space, particularly in Edinburgh and Glasgow city centres.

“It’s important that the market continually provides new grade A space so that we can continue to meet inward investment requirements – people that are new to Glasgow, new to Edinburgh, Scotland, whatever the case may be,” Lewis says. “And I think it will get tougher.”