Reach for the Sky

The race to dominate the skyline continues apace as the tallest structure in the world, the Burj Khalifa (Khalifa Tower) in Dubai is set to be eclipsed during the first half of 2013 by the 220 storey Sky City.  Built in Changsha, in the Hunan Province of China, it will top out at 838 metres, beating the Burj Khalifa by a mere 10 metres.  Peanuts!

However, the more interesting aspect of Sky City’s development is it’s method of construction.  Constructed by Broad Sustainable Building, 95% of Sky City’s fabric features prefabricated construction techniques which will allow the construction to progress at 5 storeys a day.  Developments in off site manufacturing techniques and materials development have meant that Sky City is able to boast impressive statistics for environmental, sustainability and health and safety measures.  The financial and programme savings achievable by construction the majority of a building of this size and height at ground level cannot be underestimated.  BSB are expecting to finish this building within 90 days, an astonishing achievement, which, if previous projects are any measure of potential, will be achieved.  The video link at the bottom shows the completion of a 30 storey hotel in 15 days.

The current mantra for development and construction is that the price and unavailability of land is pushing developers upwards, rather than outwards.  To meet this increasing trend, technical construction techniques require to develop ever faster to meet the demands and technical requirements.  The Chinese appear to be spearheading these developments at present, in July, Zhang Yue, Chief Executive Officer, Broad Sustainable Building, told a Reuters magazine that he plans build at a two-kilometre high, 636-floor tower.

This will be bad news for the Kingdom Holding Company, whose Chairman Prince Alwaleed bin Talal said in June 2012 that the 1,000-metre high tall Kingdom Tower in Jeddah will be completed by mid-2017.  That is not all, Avesta Group an Azerbaijan company, has advanced plans to build what at the time would be the tallest tower in the world, standing at 1,050 metres, surrounded by number of artificial islands and a Formula One racetrack. This project is likely to be completed between 2020 and 2025, but will it be eclipsed before it’s even built?.

View the BSB hotel development here:

http://bit.ly/Umanuu

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

Government Property Unit under the microscope

Some interesting commentary this week on the subject of the Government land and built estate ownership and occupation.  The cross party Publlic Accounts Committee, chaired by the Rt.Hon Margaret Hodge, has published a report recommending that improvements in building occupancy should be achieved, that unoccupied buildings should be made available to mall businesses to rent and that the Government should continue to realise value from built assets i.e. sell surplus real estate.

The drive is to save the UK tax payer in excess of £800 million per year in operating costs and to realise capital receipts.  Last year the Government Property Unit achieved sales on over 250 freehold assets, realising £640million of cash for the coffers.  In addition to this, co-sharing and more efficient usage of space and facilities has saved over £48 million, GPU claim.

The Government is the UK’s biggest property owner and also the biggest tenant.  Staggeringly, the property portfolio is worth in the region of £370 billion (even in this market?!) and costs £25 billion a year to run.  A Cabinet Office spokesperson has said that the recommendations will be considered carefully and the potential for savings taken into account with those savings already achieved.

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

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.

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.

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.

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

R is for...

Relocation:

Back on firmer ground, well at least we have a topic, phew!

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.

F is for...

Facilities Management:

It’s not just about getting the toilets cleaned and making sure there are enough pencils in the stationery cupboard; the modern facilities management professional is regarded as a key member of the management team at any self respecting organisation.

In recent years, the value to an organisation of an efficient and well run facilities management provision has become recognised as a key component in the success of the organisation.  The role covers many elements that do not fall into most organisations core activity and thus, like the real estate remit, are often liable to be overlooked, until, that is, something goes wrong.

Trends in the field have changed over time.  Once, an Office Manager would have a department of staff who would, to greater or lesser effectiveness perform the tasks and activities required of the organisation.  In the 1990’s the dawning of the era of “Total Facilities Management” saw many of those in house teams, including the management, subsumed into the new style service providers, large organisations who were often no more than a collection of smaller service providers themselves.  This change did not quite hit the mark; whilst there were undoubted cost savings and some improvements in areas of efficiency the loss of the Management function and “ownership” proved to be an unsettling experience for some client organisations.  The perceived loss of control and an apparent impersonal aspect to the arrangements heralded the next era.  It would appear the solution is a mix of an in house management function which controls a contracted provision of services.  The age of the Facilities Manager as a contract manager is here.

Increasingly the FM is looking after a plethora of legislative compliance for the organisation, with environmental and sustainable aspects to the fore.  The range of compliance requirements in the workplace is vast and whilst some of the technical aspects are taken care of in their execution by contracted service providers, the FM has to be up to date and aware of what is required and what they need to be ensuring the organisation is covered against.

So, next time you visit the photocopier and press the button, remember not only the person who has filled the trays with paper, but also the person who has arranged for that to be done!

James Alexander Consultants are expert in assessing your facilities management requirements and, with you, determining a strategy to develop the correct balance of service.  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.

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.

Sweat the Assets

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.

$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.

The First Blog!!

Welcome to the new blog of James Alexander Consultants. We hope to post interesting commentary on all topics in the commercial real estate and property world and, hopefully, generate interesting and informative debate in the process. Let us know your thoughts and views and help to make this an interesting and informative blog.