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.

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.

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

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

Olympic Gold!!

Our friends at MoveHut (www.movehut.co.uk) have an interesting insight on the impact the London Olympics is having on commercial lettings.  Jodee Redmond blogs:

“With the anticipated influx of visitors expected during the upcoming Olympic Games in London, space is at a premium. Landlords, including commercial property ones, are getting creative to help meet the demand for space. Temporary tenants are not being especially picky at present, and landlords are prepared to rent out all available space during the Games.

The city of London is expecting 11 million fans, athletes and sponsors to arrive in what is already Europe’s second-most crowded city next month. The huge increase in population means there is an increased demand for temporary shops to carry clothing, souvenirs and other items, as well as storage facilities. Media outlets require good vantage points for television cameras, which means landlords have the opportunity to make some money from what had previously been nothing more than dead space.

The Games will run from 27 July – 12 August. Homeowners who have space to rent have already anticipated the increased demand for space by increasing their asking price by up to six times the normal rate. Commercial landlords are also increasing the rates of their asking prices.

In Beijing and Athens, events were either held in outlying areas or neighbourhoods were demolished to create venues specifically for the Games. Most of the sites where events will be held during the London Summer Olympics are in built-up areas.

A former limestone quarry near the Bluewater shopping centre in Kent, southeast England is being offered for hire to contractors looking for temporary staff accommodation during the Games. The site is located close to a high-speed rail link, which means that anyone staying there can travel to the Olympic Stadium in Stratford in a very reasonable 30 minutes.

Empty shops are in high demand in anticipation of the Games, and ones which are situated close to popular shopping areas like Oxford Street and Covent Garden do not last long. Retailers are arranging to rent these spaces to open temporary shops to sell items like high-end clothing during the Games. Depending on the size of the space and its location, landlords are charging anywhere from a few hundred to £20,000 to rent a store which may be open anywhere from one day to two weeks.

The closer an available building is to the Olympic Park, the more a landlord will be able to charge for rent during the Games. Rather than thinking about what the space is currently used for, now is the time for commercial property owners to be creative about what they can offer a prospective tenant and how much occupying the space would be worth during the 2012 Summer Olympics.”

Not sure about that 11 million figure, but we know a lot of people are coming and the opportunities for property owners in the east of London are significant.

Anyone fancy taking August off!!

See the original blog here: http://bit.ly/MXgL6T

New Working Practices:

We may have said this before, but after staff costs, the cost of the occupied estate is the next biggest expense for any organisation.

The adoption of new working practices can provide organisations with the opportunity to reduce space related overheads, as well as provide staff with options on how their work life is organised.  The opportunities to reduce the cost overhead involved in accommodation for operations are many and varied.  Their suitability for deployment is, amongst other things, dependent upon the individual circumstances of each organisation, these are not one size fits all solutions.

• Footprint:  keeping in mind the essential means of escape routes consider whether the personal footprint could be reduced.  It is recommended that 11m³ per person is achieved, but the reduction of the furniture footprint (smaller workstations) is one way which could help. 

• Working away from the Office:  technological development now means that providing essential staff with the means for mobile communication is within reach of all organisations. This does not work for all job functions and should not be taken as a wholesale opportunity to close the office, but those who are out of the office more than they are in do not, generally, need workstations.

• Technology: developments also mean that less equipment is required to provide desk top solutions for staff, coupled to a reduction in workstation size leads to smaller footprint.  Printing and photocopying devices are now available with much smarter interfaces and options.

• Maximise: have you ever wondered why the meeting and conference rooms are empty for most of the time?  Rethink the strategy and maximise usage, software packages exist to help with this.

• Open Plan:  it’s not new to suggest going down the open plan route, but think about doing away with personal offices.  Research has shown that by careful space planning, suitable provision of meeting rooms, spaces and break out areas the need for personal offices is significantly diminished.

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.

O is for...

Outsourcing:

Non core activities outsourced, not a news topic you may say, but how far does this extend within your organisation?  The opportunity to outsource these types of non core activity has increased in recent times.  You are probably familiar with the “run of the mill” in outsourcing, from catering to waste management, office supplies to ICT.  But what about the outsourcing of your HR activity?  Or payroll?

The opportunity to bring in specialist services without the requirement to employ these on a full time basis is one of the backbones of the outsourcing principle.  Another is the opportunity to access specialist advice on non core activity, advice which would otherwise be expensive to maintain on an in-house basis.

The increase in legislation surrounding employment has seen a rise in the opportunity for SMEs (small to medium sized enterprises) to bring in specialist consultants and providers to keep them on the right side of employment law and up to date with current staffing requirements.

Similarly, there are opportunities for occupiers to get help with their accommodation and real estate services.  Many larger occupiers will have provision in place, but the smaller occupier can seek support with real estate related issues too.  From the outsourcing of facilities management to landlord and tenant issues there are opportunities to seek professional support in ensuring your organisation is fully up to speed.

James Alexander Consultants can help you understand your property, facilities and compliance requirements, 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.

Review Time

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.

News from across the Pond

Are the winds of change for good blowing for parts of the commercial property sector in the USA?  It was reported at the weekend that during the last quarter of 2011the US banking fraternity increased their lendings for commercial real estate projects, the first increase in volume in 2 years.

This is seen as a clear signal that the US banking sector is starting to realise its return to healthy trading, in part supported by Government actions following the 2008/9 crisis in allowing the extension of loan maturities, thus allowing banks time to bolster their own finances and commercial real estate values to rise.

Banks leading the return to lending include Wells Fargo & Co, Bank of America Corp, U.S. Bankcorp and JPMorgan Chase & Co.  Default rates are at the lowest for three years, including multi-family units and this, combined with an slight increase in GDP to 3% is giving a feeling of optimism in some quarters; there is great hope abroad that this heralds a more positive outlook. 

Meanwhile, in the UK……..

$10 BIllion in the City & West End

City investment advisors Gesham Down Capital Partners (www.greshamdown.com) calculate that there is more than £6.5 billion of commercial property for sale across Central London: around £5 billion in the City and £1.56 billion in the West End.

Gresham Down predict markets polarising between equity and debt investors, with overseas investors - predominantly equity investors, who currently represent almost half of buyers in London, dominating the market.  They estimate banks are trending towards selling or encouraging their borrower clients to sell and this will accelerate "with further stock being added from owners looking to take profit on purchases made within the past 2 years and from maturing loans within CMBS portfolios".  The number of active lending banks has fallen from 25 to no more than 10-15.

Gresham estimates that there are currently £1.43 billion of investments under offer in the City and £1.08 billion in the West End. Turnover for the year stands at £4.17 billion for the City and £3.33 billion for the West End, an increase of approximately one third compared to 2010.

Equity buyers are recommended to focus on sales from buyers who have to sell, whilst vendors are being told to focus on equity, rather than debt-based buyers.

Harry Potter Stars' Invest in Property

The young stars of the Harry Potter movie franchise have been spending their respective wealth by investing in property in the UK and abroad reports http://www.primelocation.com./  Harry Potter, in the guise of Daniel Radcliffe, has eschewed the attractions of Privet Drive and is said to have spent a tidy £11.2 million on investment properties, including a £3.5 million penthouse apartment overlooking the Hudson River in New York.

Rupert Grint who played the irrepressable Ron Weasley, has spent more than £9 million on three addresses and, whilst all are believed to be in the UK, it is thought The Burrow is not amongst them, whilst the very lovely Emma Watson has maintained her muggle roots and divided her investment portfolio of undisclosed value between Britain & France.

No details of the acquistions are available but it has to be assumed that they will be predominantly residential, rather than commercial investment properties.

Harry Potter and the Deathly Hallows 2, the last film in the series, was released in the UK on July 7th.