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

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?

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?

Innovate:

Changing times call for ever more thoughtful approaches to your asset management challenges.  The current marketplace within commercial property is even more volatile than usual, and, whilst geography plays its part, the general view of the marketplace is that conditions are hard and likely to be so for the forthcoming time.

Spending time in careful consideration of the challenge this places on your business with regard to your built assets and liabilities is therefore well worth it.  In a previous post we have talked about the place within your business the build estate holds and the opportunity for the review and assessment of the estate in the light of this.

Detailed knowledge of your real estate liabilities will enable you to clearly plan ahead and, in conjunction with you business requirements, determine whether there are any opportunities to do things differently.

There may be scope to reorganise finances through the asset and balance sheet, to renegotiate terms with your landlord or reorganise loans on freehold occupancy.  Assessment of the utilised estate and how it could be improved, could allow for sub-letting (should the terms of the lease allow).  Group companies can potentially co-locate to reduce costs and vacating premises can save costs, even if the lease is still in force, with running and occupancy costs reduced to near nil and the potential for rates relief.

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.

An Alternative to the commercial lease?:

A new entry into the serviced office category will open this month.  Dryland Business Club on Kensington High Street will provide high end service options for those not wishing to take on the rigours of a commercial property lease, with flexible arrangements to suit a variety of usage profiles.

Offering very high standards of accommodation, service and facilities, including usage of a chauffer driven Maserati Quattroporte, the new complex is the first of a string of centre being developed by former Foxtons boss, Jon Hunt.  Mr Hunt is bringing a new approach to the serviced office sector by making the facility more attractive to those who require the convenience of a London a base, without maintaining the commensurate overhead.  Packages start from £139 per month.

The services office sector has been progressing well for many years, with many seeing Regus as the flagbearer, and many smaller players coming into the market to address the requirements of the SME and sole trader.  From the look and style of the Kensington High Street Dryland is aiming at the entrepreneur for whom a prestige address in the West End without the hassle of running the offices themselves.  When fully occupied the facility will return approx. double the rent that could be expected under a normal rental arrangement, so not all bad!!

A second facility is expected to come on stream in Holborn at a later date.

Time to review and reassess?

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.

P is for...

Planning & Strategy:

Occupying business premises is no laughing matter.  The costs involved can be significant and the penalties, should you get it wrong, can be severe.

Having said that, the opportunity for it to go well is significant!  Like all property transactions in the UK (well England and Wales anyway!) the pace of movement is usually somewhere akin to that of the proverbial snail.  Lease break clauses do (should) not usually sneak up on you, they are telegraphed well ahead of time (when the lease is signed?).  So the opportunities for you to plan aspects of your estates strategy are easily able to be recognised and addressed.  However, that is not the whole picture.  Not all elements are so easily planned.  As we have said many times before, the real estate only exists to support your core activity, it’s there to help you to produce your widgets or build your social media empire or whatever.

And (yes, you can start a sentence with and) that’s where the challenge comes.

Planning a strategy to match your real estate occupancy to your business’s operational requirements is not too difficult in principle, but will throw up some very challenging questions to you and your colleagues.  I was with a client recently and the discussion revolved around the business’s requirement to relocate to larger operating premises, the availability, or lack of, suitable prospects in the locality and the impact a more significant geographical move to achieve the right accommodation could have on the business in terms of the potential for the loss of key staff.  An interesting conundrum and one that the jury is still out on.

Size, location, mix, usage and cost will all play a part in developing a coherent strategy for real estate and the activity should be undertaken with the same thoroughness that is applied to the operational aspects of the business.

James Alexander Consultants can help you find your way through to the best solution to your accommodation needs.

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

D is for...

Dilapidations:

There comes a point in every lease when the subject of dilapidations raises its head.  This need not be as daunting a prospect for the tenant or lessee as it may seem, however it is one that should be approached carefully.  In general terms most institutional leases will require the lessee to return the asset to the landlord at the end of the term in the same condition as they originally took it over.

However……!

Negotiation is the key.  In general terms the landlord is looking to make sure that their asset has not been adversely affected by the tenant’s occupation.  Now, being good lease abiding tenants, all clauses in the lease relating to refurbishment and alterations will have been abided by.  These usually form a requirement for redecoration on a periodic basis in longer leases and for any alterations, upgrades or refurbishments requiring approval from the landlord before proceeding.  Therefore, the landlord will know what general condition the asset will be in and, with regard to tenant upgrades and refurbishment, these will have been undertaken up to the latest regulations, so will, potentially be seen by the landlord as improvements.

If you are intending to exercise a break in the lease, your lease will determine the notice period to give, if the lease is terminating then the date will be well known. These are the ideal timeframes to commence discussion with the landlord with regard to dilapidations.  Each landlord will be different as will each situation.  Remain open to suggestion and do your best to limit your liability.

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.

Govt to release land for building

The Government plans to release 1,000s of acres of previously developed land for alternate usage. It is expected that by the Autumn this year each Department with significant surplus land holdings will produce plans detailing those areas to be made available. This Central Goverment initiative is expected to be followed by local Councils, many of whom also retain surplus land banks.
The potential impact on the housing sector is anticipated to be significant, with many in the sector already welcoming this initiative.