Segro shrinks

Segro continues to divest its portfolio of assets with an announcement of a further series of sales totalling a total of £159 million.

An industrial site in Crawley, a site in Munich, and four industrial estates in Runcorn, Lymedale, Pucklechurch and East Midlands airport make up the latest assets to be disposed of as part of a £1.6 billion divestment programme designed to turn round the fortunes of the company.  In the last 12 months assets values at £680million have been sold, but the current harsh climate has still seen £180 million fall from the value of the remaining portfolio.

James Alexander can help your organisation review your property and land portfolio and develop strategies for better usage and utilisation, as well as determining strategies for asset divestment, or acquisition.  Get in touch and see how we could help.  innovation@jaltd.co.uk

Home work

For many office workers today is the first day back in work since the Christmas break.  However, the prospect of an extended break is just too difficult for some to contemplate.  The standard IT and technology products and services most companies provide to staff to assist them do their jobs and stay in contact during the working week also come with additional costs.

It has become common practice for some staff to regularly check eMail and intranet services long after the working day has finished.  For some, the opportunity to catch up on a few late eMails whilst on the train home has not satisfied the desire.  The temptation to do just one final check before turning out the lights for the evening has led to an increasing number of people turning their bedrooms into secondary working spaces.  In a recently conducted survey, one in three participants admitted checking eMails, finishing reports and checking online work activity from the comfort of their bed, some spending as much as two hours a day doing so.

Apart from health risks with potential problems with posture and muscular damage from a poorly supported working position, there are also relationship perils for couples who do not establish boundaries for what is acceptable behaviour in this regard.

Of course, a downside for one group represents an opportunity for others and one bed manufacturer in the USA is marketing a bed which comes with its own power sockets and wi-fi connection!

So, if you have not faced a mountain of eMails on your return to work this morning, you have spent too much time in bed!

Reach for the Sky

The race to dominate the skyline continues apace as the tallest structure in the world, the Burj Khalifa (Khalifa Tower) in Dubai is set to be eclipsed during the first half of 2013 by the 220 storey Sky City.  Built in Changsha, in the Hunan Province of China, it will top out at 838 metres, beating the Burj Khalifa by a mere 10 metres.  Peanuts!

However, the more interesting aspect of Sky City’s development is it’s method of construction.  Constructed by Broad Sustainable Building, 95% of Sky City’s fabric features prefabricated construction techniques which will allow the construction to progress at 5 storeys a day.  Developments in off site manufacturing techniques and materials development have meant that Sky City is able to boast impressive statistics for environmental, sustainability and health and safety measures.  The financial and programme savings achievable by construction the majority of a building of this size and height at ground level cannot be underestimated.  BSB are expecting to finish this building within 90 days, an astonishing achievement, which, if previous projects are any measure of potential, will be achieved.  The video link at the bottom shows the completion of a 30 storey hotel in 15 days.

The current mantra for development and construction is that the price and unavailability of land is pushing developers upwards, rather than outwards.  To meet this increasing trend, technical construction techniques require to develop ever faster to meet the demands and technical requirements.  The Chinese appear to be spearheading these developments at present, in July, Zhang Yue, Chief Executive Officer, Broad Sustainable Building, told a Reuters magazine that he plans build at a two-kilometre high, 636-floor tower.

This will be bad news for the Kingdom Holding Company, whose Chairman Prince Alwaleed bin Talal said in June 2012 that the 1,000-metre high tall Kingdom Tower in Jeddah will be completed by mid-2017.  That is not all, Avesta Group an Azerbaijan company, has advanced plans to build what at the time would be the tallest tower in the world, standing at 1,050 metres, surrounded by number of artificial islands and a Formula One racetrack. This project is likely to be completed between 2020 and 2025, but will it be eclipsed before it’s even built?.

View the BSB hotel development here:

http://bit.ly/Umanuu

James Alexander Consultants eMail us on innovation@jaltd.co.uk or see our contact page for our numbers.  We look forward to speaking with you.

Hinkley gets the Go Ahead……

Finally some good news on the horizon for the UK’s civil nuclear power generation programme.  Following the disappointments after the withdrawal of German interest in the new build agenda, step forward the rural county of Somerset to put things right.

After more than three years of negotiation, a major obstacle to the construction of a new nuclear reactor on the site at Hinkley Point in Somerset was overcome after the local authorities involved dropped their opposition to the scheme.  French utility company EDF Energy has promised to contribute over £64 million to the local economy, to improve educational facilities in Somerset, community centres as well as allowing the construction of housing.  Spending plans will be presented by the company before the end of the year.

The real estate and commercial property implications are significant, with construction costs on the reactor facility alone expected to be in the region of £7 billion.  Additionally, there will be significant knock on effects in the locality, with related and other support services.

This is not, however, the signal for the first spade to be put in the ground.  Despite the fact that the generating capacity of the UK remains in perilous state, with the much discussed date of December 2017 looming there are plenty of considerations yet to be defined.

As well as convincing the nuclear regulator to grant a nuclear site license, EDF will require to obtain the necessary environmental permit together with approval for the design of the intended reactor, and there’s the small matter of the planning inspectorate.  The Energy Secretary will have to approve their overall finance plan and, to cap it all there will have to be approval of the intended charging structure for the energy produced.

There are a profusion of alternate, energy producing schemes in process in the UK, all of which have a place in the energy generating mix.  This important step in the development of the power generating agenda moves the UK a step closer to keeping the lights on.

Government Property Unit under the microscope

Some interesting commentary this week on the subject of the Government land and built estate ownership and occupation.  The cross party Publlic Accounts Committee, chaired by the Rt.Hon Margaret Hodge, has published a report recommending that improvements in building occupancy should be achieved, that unoccupied buildings should be made available to mall businesses to rent and that the Government should continue to realise value from built assets i.e. sell surplus real estate.

The drive is to save the UK tax payer in excess of £800 million per year in operating costs and to realise capital receipts.  Last year the Government Property Unit achieved sales on over 250 freehold assets, realising £640million of cash for the coffers.  In addition to this, co-sharing and more efficient usage of space and facilities has saved over £48 million, GPU claim.

The Government is the UK’s biggest property owner and also the biggest tenant.  Staggeringly, the property portfolio is worth in the region of £370 billion (even in this market?!) and costs £25 billion a year to run.  A Cabinet Office spokesperson has said that the recommendations will be considered carefully and the potential for savings taken into account with those savings already achieved.

James Alexander can help your organisation review your property and land portfolio and develop strategies for better usage and utilisation, as well as determining strategies for asset divestment, or acquisition.  Get in touch and see how we could help.  innovation@jaltd.co.uk

Cameron & Osborne step into the planning breach.

Just days after our last update on the planning situation Prime Minister Cameron steps forward to introduce clarity where once there was dithering..…..

With Mr Osborne, who is the Conservative Party’s chief election strategist, further reforms to planning rules are proposed to promote growth in the economy.  The new legislation is expected to provide for less time for appeals by limiting local residents’ abilities to appeal and, most controversially, to allow council to authorise building on the green belt, by redesignating other areas, thereby providing more land in the previously sacrosanct green belt for new build projects.  With sparkling insight, Mr Osborne has indicated that he would like a planning system similar to that in China, where industrial pollution, degradation of the countryside and an appalling health and safety record are the watchword.

These reforms form part of the Government’s financial package of £40 billion to aid and promote growth.

House builders in the UK currently hold in excess of 200,000 plots for development with planning permission.  Why are these not being built on?  Could it be anything to do with the lack of availability of mortgages and funding?  I wonder.  Rather than meddle with planning reforms that have barely had a chance to bed in and start to take effect, perhaps Mr Osborne could sit down at Gregg’s with some of his banking friends and ask if they would be kind enough to let the UK taxpayer have some of the money the Government provided for bonuses to allow house building to get moving.

Just a thought.  

Planning Review - All Change?

In March this year we posted on the new National Planning Policy Framework and the likely impact it would have on the process for new development in the UK.

The Department for Communities and Local Government issued their Impact Assessment yesterday, which at 79 pages is longer by a margin than the Framework document itself.  Amongst much else, the Impact Assessment contains some fascinating insight into the projected costs of the consolidation of the planning processes proposed in the NPPF and by whom these are to be borne!  Read the full document here:

http://www.communities.gov.uk/documents/planningandbuilding/pdf/2172846.pdf

Three months on and the jury is still out.  Lining up in one corner of the green field is the “pro development” lobby and, currently, they would appear to be reassured by the legislation, in that there is a presumption in favour of sustainable development.  In essence, if a proposed development is well located, with good public transport links and connection to the town center, is of a high quality design and the construction materials can be proven to be sustainable then all should bode well.

In the opposite corner are those who, let’s not say they are “anti development” but are most concerned for the future of our green and pleasant land and they too are feeling encouraged.  Leading the charge are Friends of the Earth and the National Trust who, with many others have heard the Government state that the green belt is sacrosanct and that the natural heritage of the nation needs to be defended for future generations.

So, peace and love abounds with both sides feeling satisfied that their concerns have been listened to and addressed, at least in part.  However, as the expression goes, “something’s got to give”.

I think we can look forward to the detail of applications that come under opposition fire being thrashed out in the courts of the land, over many hours and at much cost.  The much heralded, new and slimmed down, planning framework may be about to get a lot fatter as each challenge is mounted. 

Anyone for a Judicial Review?