Take stock and review

The commercial property sector is to come under further pressure during 2012 in the light of the current economic climate and the uncertain times ahead for the Euro Zone.  Both rental and capital values started to show sign of weakening during the Q4 last year and are expected to continue to decline during 2012 as the continuing uncertainty over the future of the British recovery continues.  Tough market conditions in the retail sector have led to have affected high streets across the country.  Even the usually resilient London market is starting to show significant stress with rental levels and capital values starting to decline as the number of potential transactions slows.

However, all is not lost!  With the decline in value for the landlord comes the increase in opportunity for the tenant.  Now is the ideal time to undertake a comprehensive review of all your lease and occupancy arrangements.

• Are you able to exercise any lease breaks?
• Are any leases up for rent review?
• Are you holding over?
• Have your business needs changed?
• Is your occupancy at the optimum?
• Could you place any non essential requirements in better value accommodation?
• Is there an opportunity to outsource activities?

Every cloud has a silver lining, see what lies behind this one for your business.

Innovation@jaltd.co.uk

Residential market continues to fall

As the banks’ mortgage lending criteria continue wreak havoc with the UK residential housing market Rightmove (www.rightmove.co.uk) reports the number of searches carried out on their website in for the first 10 days of 2012 reached record levels.

As po faced bankers continue to be allowed to make everyone else pay for their mistakes, setting lending criteria that has surely strangled the housing market into submission, new to market property listings plunged to a 10 year low.  London prices managed to go against the trend with a rise in values of just over 6%, but against the lowest level of activity in over three years.

As expectations are that the market will continue to be difficult during 2012, of those 44 million searches that were carried out, how many were done so in hope rather than expectation? 

Reading Acquisition Update

Rumour abounds that Prupim has acquired the biggest office development site in the south east.  The 3.3 acre site, in the centre of Reading, is adjacent to the mainline rail station and currently houses Energis House, 105,000 ft² of prime office space and a development plot.

Energis House is the controversial, loved and hated in equal measure, ex Metal Box building, an octagonal throwback to the heady days of the 1960’s with fine views over Reading Gaol.  For over 10 years there has been speculation as to the future of this site, with interest being shown from a number of parties over time.

The site already has detailed consent for upwards of 400,000 ft² of office space in a scheme that would include the demolition of the existing building.

DIO to partner?

The Defence Infrastructure Organisation, which formally replaced Defence Estate in April 2011 has issued a formal invitation to private sector companies interested in managing the department’s estate.

Through a process of “soft market testing” the theory that best value for money will be achieved through greater involvement of the private sector will be explored.  The soft market testing will provide the opportunity for all parties to explore different and, hopefully original, ideas that will enable the best value for money agenda to be pursued.

DIO has already ruled out the possibility that an existing contractor could be chosen as a partner in this activity, with acting Chief Exec Andrew Manley saying that they would not be able to “bring the right mix”.  This rather harsh assessment would seem to condemn all current incumbents into a 'task driven, contracting only' role, perhaps a comment on previous procurement policy. 

DIO has announced that it is targeting savings of £1.2 billion over the next four years through efficiency measures and asset sales.  The MOD is owner to one of the largest estates of land and built asset in the UK.  Over 240,000 hectares of land, much used for training purposes, is owned and any potential asset sales, particularly of land parcels, will create significant interest.  The MOD acknowledges that DIO is obliged to consider the potential application of the Crichel Down Rules to all of its surplus sites.

Another factor in this exercise is the effect that the return of service personnel to the UK from Germany will have.  It is expected that all 20,000 troops will return over the next 10 years and the requirement for accommodation will be a significant element in the thinking.  Currently around 50,000 service family accommodation properties are managed on behalf of the MOD.

Back to Reality?

As the UK is lashed by storms, heavy rainfall and record high winds there are those amongst us who wished we had stayed under the duvet this morning.

Today was the first official day back from the Christmas and New Year holidays, although I did hear today that some are stringing it out until Thursday and some even into next week (where did I go wrong?)! We have passed the half way point and the nights really are starting to pull out (really?!) and we must acknowledge that a New Year is upon us!

Now is an ideal time to consider the real estate and property opportunities your portfolio represents for your business.  Whether you need to review your existing portfolio of commercial rented accommodation or review what your business assets are doing for you, James Alexander Consultants are ready to help with impartial, client focussed advice.  Get in touch, eMail us on innovation@jaltd.co.uk

Should you have a reorganisation of your working space in mind and want to assess the opportunities without having to resist product offerings in the process, we can assist:

Property Consultancy -
assessing business needs with current asset base

Asset Management -
development of strategies for rationalisation, expansion, acquisition and disposal.

Project Management -
implementing change strategies

Business Mentoring -
in financial and general business administration

We work for you, and with you and help you understand how your assets will work harder for you in 2012. 


Don't forget to get in touch on innovation@jaltd.co.uk

Wishing you all a very Happy and Successful New Year,