Monday Interview: Gordon is an ever-present in shifting hospitality world

“I’m an overnight success,” he quipped as we sat down to chat in the partnership’s Glasgow office.

In his new role, which he rose to from his previous berth as principle commercial partner, Mr Gordon has overall responsibility for leading the practice, which in recent years has expanded into multiple new services beyond its core residential and commercial valuing work. These range from architectural drawing and energy advice to planning and property inquiry services.

For much of his career, Mr Gordon has been known for his work in the Scottish hospitality sector, where over several decades he has built and retained relationships with a host of successful operators. It is a period which has seen the industry undergo significant upheaval.

When he joined DH Hall in 1986, after an unhappy stint as a bank teller, it primarily focused on residential valuing, having earned positions on bank lending panels. But it would go on to build a foothold in the commercial property world, a presence it initially established when a major brewer began to lend money to publicans. This was a time when the traditional image of the pub trade was beginning to evolve into more sophisticated offerings.

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“I couldn’t quite figure out why there was a brewer lending money,” said Mr Gordon, who joined DM Hall as an apprentice to Gordon Fisher, its first commercial surveyor in the west of Scotland.

“Through a relationship of Gordon Fisher’s, we ended up being the sole approved valuation provider to Tennent’s, when they were taking security of pubs.

“Suddenly we were doing several pubs a month, in fact [at] some points several a week.”

Mr Gordon added: “A lot of what the brewers were doing was giving publicans money to put in chrome and glass and put in ladies’ toilets.

“Style bars were starting to emerge in the late ‘80s, early ‘90s, so there was this surge in demand for borrowing from publicans, and we were led into gaining this enormous amount of experience and market knowledge around the pub and leisure sector.”

Alerted to the exploding market, the big banks decided they wanted a piece of the action, and before long began to replace brewers as the major providers of finance to bars, hotels, restaurants and social clubs. It was a good time for DM Hall.

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“The brewers weren’t necessarily comfortable lenders, so the banks re-financed it all,” Mr Gordon said. “And DM Hall, having just valued it all for the brewer, were asked to go and value it for Royal Bank, Bank of Scotland, Clydesdale Bank. We had to go and revalue a whole load of assets again as the debt moved from the brewers to the banks.”

The boom would come to an abrupt end when the financial crisis blew up in 2008 and 2009. Seemingly overnight, the banks shifted their approach to the leisure sector as they strove to shore up battered balance sheets.

Now, more than a decade on, brewers are lending to the pub market again. “[Banks] are much more discerning about what is a good debt opportunity [than they used to be], and what is not,” Mr Gordon said. “Banks will definitely be open for business in leisure but they are very, very selective.

“They will still retain a large amount of leisure property lending, but only really [against] good quality properties and very experienced borrowers with a good track record. Really good financial control is imperative. You will not get through the door of a bank as a leisure operator unless you are serious about your business. The first-time buyers, the inexperienced operators, the casual operators just don’t survive. They certainly won’t get bank debt.”

New entrants to the industry are now more likely to take on leases than acquire properties outright, Mr Gordon added. “That’s not just big pub investment companies, the typical landlords [they lease from]. [There are] a lot of private landlords in the pub sector now, small pension funds and husband and wife owners and small independent groups who will rent out the pub now,” he said.

“Making that next step to [property] ownership is harder than it has ever been, and in some ways, I think it is good, because the ones who do make that transition are very, very professional in the way they operate.”

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Mr Gordon observes that, while the pool of operators has shrunk in recent years, the sector is more “sustainable” compared with the days when lending was more profligate. Debt levels across the trade are lower, which he welcomes.

But while he feels the increased prudence has its benefits, he said there has been a decline in local decision making on the part of the banks. It means they often miss good opportunities to lend high-quality 

operators in “sub-markets” such as the west end of Glasgow, including Finnieston.

“The reason for that is policy is driven from attitudes and sentiment that is London-centric,” Mr Gordon said. “They set a policy for the UK. They can’t set a policy for every sub-market. That’s the way financial institutions work.”

He adds: “I just think that banks are not sufficiently flexible, and understandably, to recognise every sub-market that exists, which isn’t great for economic growth. Retail is another example of that, and [property] development is the same.”

Though Mr Gordon has had a long association with the leisure industry, it forms just one part of the DM Hall commercial offer, with the partnership active in valuing properties in the retail, industrial, land and healthcare sectors.

In the west of Scotland alone, it now has 13 commercial chartered surveyors on its books.

“It’s been great fun growing it,” said Mr Gordon.

Asked to sum up his priorities in his new role, Mr Gordon said: “We want grow and develop the business. That’s the first thing.

“It is really important to me that everyone enjoys coming to their work. DM Hall really does have a good retention record. I’m by far and away not the longest-serving guy. I want to create a nice environment to work in [where] people feel part of a business that they can contribute to and be heard – be a person, not a number.”

He added: “Although we are quite a large company now, [with] 27 offices and more than 250 people, we still want to retain the level of intimacy that I experienced when I was a young surveyor coming through. I knew I could go and speak to the senior partner - his door was always open.

“If this phone rings from the graduate down the road, I will answer it.”

Six Questions

What countries have you most enjoyed travelling to, for business or leisure, and why?

When you spend most of your life under the west of Scotland cloud, it’s hard to beat some Mediterranean sunshine. I especially like Spain and Italy, ideally in towns and cities away from the main tourist traps, where the food and wine are always magnificent.

When you were a child, what was your ideal job? Why did it appeal?

From an early age I wanted to be a professional footballer, mainly for the prospect of glory and fortune. Sadly, some serious knee injuries (not to mention an abject lack of talent) put paid to that at a fairly early stage.

I then wanted to be a PE teacher or journalist, but the explosion of financial services in the mid 1980s meant the banks came along like army recruitment squads to our school, and swept up a large chunk of the class of 1984. Before I knew it, I was unwittingly stamping scores of gas bills all day, wondering where it all went wrong.

What was your biggest break in business?

In November 1986, my erstwhile former senior partner in DM Hall, a legendary figure called John Young, gave me the opportunity to start off my career in surveying. It provided a very welcome escape from that frustrating start to working life as a bank officer. I’ll always be grateful to him for that.

What was your worst moment in business?

The 2008 financial crisis and subsequent credit crunch were a severe shock to property markets around the globe. I’m sure there isn’t a professional services firm in Scotland who wasn’t affected. Our world, and how we do business today are all very different now, and the impact of that period will be felt for many years to come.

Who do you most admire and why?

Having ruled since 1953, longer than any monarch in history, remaining politically neutral during all of that time, and still loyally serving public and charitable duties in her 94th year, it’s hard not to admire Queen Elizabeth II, The Queen as an incredible leadership role model.

What book are you reading and what music are you listening to?

I tend to prefer non-fiction, and I’m reading The Inside Story of Pablo Escobar, by his brother Roberto Escobar. It’s a quite incredible tale.

After a life listening mainly to a mixture of either 80s disco or guitar based rock, I’ve recently gone a bit soft for modern American country, and I’m now listening to Luke Combs, Kip Moore and Darius Rucker.