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?

Cambridge BioPharm all over again

Earlier in the year we reported on the acquisition of Granta Park in Cambridge by BioMed Realty Trust.  The specialist REIT (www.biomedrealty.com) own or have interests in assets in excess of 12.5 million ft² ($4bn +) almost entirely in the USA, specifically in bio hubs in Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania, and New York/New Jersey.  BioMed has an exacting specification for portfolio acquisitions and it is interesting to note that Granta Park represents one of what is believed to be a very small number of offshore assets.

More news from Cambridge’s BioPharm community this week, breaking from the good people at Estates Gazette (www.egi.co.uk), regarding the continuing progress of Cambridge's BioMed Campus, the healthcare village that now has outline planning consent for 70 acres.  Project Director, Jeanette Walker, is seeking an opportunity to put the first spade in the ground by securing a prelet for 35-40,000 ft² of commercial space.  This would allow for construction of up to 100,000 ft² which, Interestingly, is not being seen as solely for BioMed / Pharma type businesses.  Great store is placed on the opportunity that this development could offer for skills transfer and working across different sectors.  There are currently commitments for occupation from Papworth Hospital, University of Cambridge, the School  of Clinical Medicine, the Medical Research Council, Addenbrookes Hospital and Rosie Hospital.

Top 5 relocation tips

Moving the business to new location or locations is a process best undertaken with a great deal of planning and forethought.  Commercial relocation is so much more than moving your house, its obvious isn’t it, but you would be surprised how many organisations approach this activity full of confidence due to someone having moved their own home last year, only to fail in spectacular fashion, costing the business dearly.

Here are my top 5 tips for your relocation project:

• Team:  Pull together your in house and professional team early on.  The fundamental requirement for the project team is to have delegated authority to make project decisions.  You will undoubtedly have a project Board with the overall Company authority, but the ability for the Project team to act within bounds is paramount. 

• Programme & Timing:  Your relocation project will almost certainly culminate in one or more moves over a series of weekends or a holiday period.  Planning for your project can start at either end of the scale.  Either working back from a mission critical end date, perhaps the expiration of the existing lease period, or working from the start, based on the longest lead time elements and the date you determine to launch the project.  Either way you cannot start the overall planning too soon.  Informal planning will have been taking place for some while but this needs to be pulled together at the earliest opportunity so that all aspects can be captured and detailed.

• Communication:  Early on in the project you will need to determine your communication strategy with staff and stakeholders.  As a source of rumour and misinformation, there are few better catalysts than a relocation project to stoke the fires!  Planning and implementing an integrated communication plan will greatly assist the project, both in terms of staff satisfaction and also in terms of buy in and co-operation.

• IT and Communications:  Make sure your IT and communications teams are fully engaged from the start.  We have seen projects that have started off in fine form, bringing the communications teams in at a later date, only to find there are practical technical matters that have been overlooked and the project suffers delays and cost overruns.

• Have a clear out!:  Develop time in the programme to encourage staff to have a good clear out of filing cabinets, old machinery, cupboards, loose boxes, equipment, records, files, obsolete bits and bobs and the many other things that will cost money to move, cost money to house and then cost money to move next time!  There will be opportunities to recycle, sell, donate, dispose and, in the process, contribute to the organisations corporate social responsibility agenda.

James Alexander Consultants can help you with your relocation project.

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

London Development in Focus

We know that the London commercial development market is struggling in the current economic climate.  The perception of scarcity in significant development opportunity, particularly for office & mixed use, has skewed the marketplace.  Difficult for most, but for those funds that are holding big cash reserves opportunity knocks.

Sovereign wealth funds, private equity firms and UK REITs are lining up to pick off those opportunities that come along, in readiness for a hoped for upturn in demand once completed.  The opportunities to acquire significant development sites are, however, scarce. Battersea Power Station was hanging around derelict and in abeyance for years, before becoming the subject of a tussle between half a dozen companies, all after the rights to spend billions redeveloping the landmark site.  The Malaysian consortium led by SP Setia & Sime Darby will commence the £8 billion scheme next year.

The Qatari state has invested over £20 billion in London in recent years, confirming the confidence they have professed in the London market.  Of note is Qatar’s 95% ownership of the Shard, London’s newest, tallest and brightest tower.  Amongst future schemes Qatar will participate in the redevelopment of  most of the Royal Dutch Shell Plc complex near Waterloo station in a venture with Canary Wharf Group.  The Qatari Prime Minister Sheikh Hamad Bin Jasim Bin Jabr al-Thani has said that “There are a lot of things in the pipeline”

Further developments will come on stream over time, including Brookfield’s purchase of Hammerson’s London buildings and 100 Bishopsgate, an office tower planned near Liverpool Street station which it owns half of and the develop an office building on London Wall Place.

The development game in London is limited to those with large equity reserves, sovereign wealth positions or very strong balance sheets who can take on corporate debt.

Watch this space…..

Gulf expansion into overdrive

Not a usual topic for a posting today, but the numbers involved are quite impressive and reflect another side to the current world economic concerns.  With news today of a very slight improvement in the UK construction industry, after two quarters of decline interesting news and figures emerge from the Gulf with MoveHut (www.movehut.co.uk) reporting on the prospects for the construction industry in the UAE.

Led by the hotel and commercial sectors, the value of projects completing this year is expected to increase over 70% to £51.3 billion.  The Gulf Cooperation Council, the political and economic union of states surrounding the Persian Gulf and Arabian peninsular, awarded construction contacts worth over £37 billion in 2011 across the commercial, retail, hospitality, and residential sectors which, with the 2012 contracts, will see building activity progress into 2013.

A significant aspect of these figures is down to the increased demand for hotel space in the GCC.  Room revenues are predicted to reach $22 billion (£14 billion) this year and are predicted to reach $27 billion (£17 billion) by 2015, according to Global Retail Development Index.  This increase in demand is due to the positive growth estimates for the GCC, based on the region’s strong economic growth and political stability. Forecasts for GCC’s economic growth have projected to 4.3%, up from 3.4%.

In comparison, the value of the Uk’s construction, across all sectors, including housebuilding (apparently there are some) is £90 billion, but the important difference is the our industry is at best flatlining, at worst continuing to decline.

Granite city takes the Gold!!

Knight Frank have produced their quarterly round up of the office marketplace (ROMP) and Aberdeen takes top spot with over 500,000ft² of deals undertaken in Q2, only just short of the total for last year!  The Aberdeen office market has been looking very strong of late and the take up has been increasing steadily since around 2009 an achievement in itself.

With some recent interest in the Aberdeen marketplace ourselves, it will make for interesting viewing to see if this trend will continue and, if so, how will it be serviced?

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.

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

Planning to Review?

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.

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?

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.

The value of Commercial Property

The commercial property marketplace in the UK continues to struggle in the current economic climate.  The first 6 months of 2012 show a downturn again and the outlook to be less that favourable.  We posted recently about regional shopping centre acquisitions and it is of note that the survey shows overall values in the sector down by 6.3% in the first 6 months of the year.

There has been a slight up turn in the office sector which, particularly in central London, has shown minor growth.  It is of note that the general trends in the office sector are in a downward direction, in terms of occupancy requirements.  New working methods, including the much heralded opportunity to work from home (how many organisations are getting that one wrong, I think we will have a posting on that subject alone in the near future?) and a changing workforce demographic are all factors that would suggest a downturn in demand could, over time, lead to a diminishing in values.  However, limitations in the availability of funding for new development, the shaky perception of the market in general, the continuing trend for conversion from commercial to residential in parts of Mayfair and the West End combined with the requirements for organisations to develop and implement ever more strict environment and sustainability plans mean that the limitations on supply are bolstering the current marketplace.

Where this will go in future is very much up for discussion.  The standard institutional lease is still alive and well and living a life under a new identity.  In this new guise, there are more opportunities for prospective tenants to negotiate with the landlord from a position of strength and as such a stronger model for occupancy is being introduced.  Watch for further development in the process.

For those with a strong nerve and deep pockets, taking advantage of the current market where values of freehold are potentially at their most advantageous to the acquirer, entering the commercial property sector in any form could be seen as the move to make.  Carefully selected and prepared, commercial sector investment now and held over the long term could be just the thing.