Olympic Real Estate Legacy

As the Olympic games's get underway and Team GB celebrates girl power with our first two medals, (well done to Lizzy and Rebecca) take 5 minutes out from your watching schedule(has anyone got any useful tips on avoiding the wall to wall coverage and actually getting some work done?!?!) and take a look at this reflective piece from http://realestate.msn.com/article.aspx?cp-documentid=23530429 looking back at the real estate legacy projects of past winter and summer Olympic’s.

The commentary on the successful and not so successful project makes for interesting reading.  The challenge for the London commercial and domestic market place post the greatest games ever held comes into the spotlight.

www.jaltd.co.uk

China’s UK nuclear energy ambitions

It is reported that the Department of Energy and Climate Change (DECC) has held high level talks with representatives from China.  A team of nuclear engineers and other representatives from the Shanghai Nuclear Engineering Research and Design Institute (SNERDI), an arm of the huge China National Nuclear Corporation (CNNC), met senior DECC officials in recent days.

Reports suggest that there is keen interest from China to enter the UK’s nuclear power generating market place by developing a plan with DECC to build up to 5 reactors at a cost of over £35 billion.  The initial premise is for CNNC and another state owned organisation, China Guangdong Nuclear Power Corporation, to bid against each other for a stake in the Horizon consortium to construct new atomic plants at Wylfa in Wales and Oldbury in Gloucestershire.  It is also understood that the sites at Bradwell in Essex, Heysham in Lancashire and Hartlepool in County Durham are also of interest to the Chinese state.  The French giant EDF currently has the developmental interest in these sites.

China has operated its own atomic plants since 1994 and Keith Parker, chairman of the Nuclear Industry Association in London, said it was "highly encouraging" that China wanted to invest in the UK. "They have 14 of their own reactors in operation and 25 under construction and they use both Areva and Westinghouse designs that could be used here. It was clear from my discussions with them that they have international ambitions."

It is believed the Chinese see setting up in the UK as an opportunity to show they can operate in one of the world's toughest regulatory environments so they can then move into other markets in Africa and the Middle East.

Whether the Chinese enter the UK market is yet to be seen, however their state backed industry would appear to be aggressively chasing opportunities that the UK market offers and, whether the UK taxpayers’ money goes to France or China, it is certain that this represents an important development in the battle to keep the lights on in the UK.

Olympic Efficiency

In April we posted about new working methods and achieving efficiencies in the working office (http://www.blogger.com/blogger.g?blogID=5846477312477271059#editor/target=post;postID=2402608171377203908).

We now learn that Government departments are taking steps to implement new ways of working to create flexibility, cost efficient and improved productivity.  It appears that numbers of civil servants will be relocating, on a temporary basis, from central London to a base in Croydon.

The move is being championed as an opportunity for central government to implement some of the more efficient practices of the private sector whilst also “helping to reduce pressure on London’s transport network during the Olympics” according to Cabinet Office Minister, Francis Maude. 

It is not certain whether this move is purely temporary, as, if the hoped for improvements are achieved then a more permanent solution could be found.  It has long been the stated goal of Central Government to move more of it’s London based activity out into the regions.  Spearheaded by the Government Property Unit, opportunities for estates rationalisation and collaboration by Departments are promoted.  Opportunities for interdepartmental estate rationalisation and co-location are continually being pursued and this latest Olympics based initiative has seen additional accommodation become available in St Leonard’s on Sea, Bedford, Dorking

and Reading.

Review the Asset Base

James Alexander Consultants are helping bring clarity to the challenges the asset portfolio’s of their clients bring.  Determining the relevance your owned or leased assets has to your business and its long term effect is fundamental to ensuring you have the correct profile in place.  Planning and managing the utilisation of those assets and their place in your business is our speciality.

James Alexander Consultants are expert in assessing your portfolio and, with you, determining a strategy to develop the correct balance of assets, their relevance and performance for you.  We develop, plan and implement the strategy, leaving you to focus on core activity and opportunity.

Our focus is to maximise the opportunity your built and land assets brings to your business whilst minimising the liabilities.  Get in touch with us to see how we can help you address lease related problems, acquisitions or disposals and help bring your portfolio into line for your business needs.

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

Olympic Update – Rental Mania!

A couple of weeks ago we blogged on the opportunities for private and commercial landlords to rent their premises out for the duration of the Olympics.  News comes today, courtesy of the International Business Times (http://www.ibtimes.com) that a property in Covent Garden has let for a staggering £115,000 per week.

Surely an Olympic record!!

Unfortunately, no details of the property are mentioned, the mind boggles as to what it might be!

It has already been suggested that the Opera House might be up for grabs next!

Shop Norwich:

In February we reported on a development in the hotly contested shopping mall wars in Norwich.  Chapelfield Shopping Centre has been attracting many of the new retailers coming into the City, at the expense of the other shopping destinations and our report on Valentine’s Day related to the recent signing by Boux Avenue, the lingerie retailer.  The pressure has continued and the Castle Mall, which was once Norwich’s premier shopping destination has been sold, primarily due, we understand, to underperformance for the owner.

Capital and Regional have disposed of the shopping centre for £77.3 million to refocus its Mall Fund towards its primarily London based assets.  The new owners are Infrared European Active Real Estate Fund, who are making their third acquisition in shopping centres since returning to the sector last year.  The Galleries in Bristol and St john’s in Liverpool were acquired during last year.   Chris Huxtable, Director at InfraRed said “we plan to add considerable value to the centres through additional investment”.

The Castle Shopping Mall occupies an iconic location in the City, being built directly underneath Norwich’s 12^th Century Norman castle.  With 33,000 m² of lettable space and 80 units and an 8 screen multiplex cinema InfraRed has an ideal opportunity to take advantage of Norwich’s 10^th place UK ranking in retail market

It will be interesting to see if capital investment will help return it to its former position as the City’s premier shopping destination.

Planning to Fail - Failing to Plan?:

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?

Dilapidations – Time to Act:

In April we posted on the subject of dilapidations and the importance to the tenant of making sure the obligations contained within the lease are adhered to.  See our original posting here:

http://propertyforum.blogspot.co.uk/2012/04/d-is-for.html

A new report from Tuffin Ferraby Taylor suggests that there has been a rise in the number of tenants who are ignoring their requirement to repair and refurbish under the lease and who are therefore running into difficulty with their landlords.

This has led to a significant rise in the number of claims being lodged by landlords against tenants who have not maintained the property in a satisfactory condition, leaving the landlord with additional costs to return it to a lettable condition.  TFT suggest that claims as high as £2 million can be pursued against errant tenant companies.  Each claim and case is, of course, different and individual and it will be interesting to see how The Dilapidations Protocol, revised for January 2012 will perform in this time of heightened activity.

Read TFT’s report into dilapidations liabilities here, on their specialist website: http://www.dilapidations.uk.com/tft/be_aware_of_your_dilapidations_liability

Take Stock of the situation

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

A modular hotel for Western Avenue

Capita Symonds announces that planning permission has been granted for a new hotel on Western Avenue.  The 6 storey 4 star hotel building will have 160 rooms and a bar, restaurant, gym and conference facilities.  Also included in the scheme is an HQ office building and a data centre.

So far so good, but the twist is that the building will be built using off-site modular construction technology.  Designed by architects ESA, part of the Capita Symonds Group, the designers have invested 5 years into the project.  Working closely with a modular construction company the company have developed a flexible solution that allows for the production process to be standardised not the design. 

The scheme which is situated on a site opposite Park Royal tube station will provide an interesting contrast to existing modular built hotels in the London region.  ESA promotes that the hotel will have a unique façade and other high quality design features and we certainly hope the new hotel will help promote the cause of off site modular construction.

It is understood that work will begin on site later in the year.

Picture of the proposed hotel design from Capita Symonds website www.capitasymonds.co.uk