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.

Social Media - Are You LinkedIn?

Social Media will continue to be big news in 2012.  As more people get to grips with their online presence and more businesses realise the potential for a new string to their marketing bow the battle for dominance in the social media marketplace will heighten.

There are over 200 social media platforms in existence and their individual customer bases are hard fought and hard won.  Many business professionals use LinkedIn (www.linkedin.com) to profile themselves, their experience and expertise as well as that of their businesses.  LinkedIn is sometimes referred to as the “FaceBook for business” which is a point of view, not necessarily one I would subscribe to, but it certainly has similar aims and allows users to have a similar experience.  With over 10 million users, (I don't know how many property professionals are on!) it is certainly worth considering your usage of this medium.

Many come to LinkedIn from a fairly low start point in terms of familiarity with social media, and “tweaking” the application and your profile can make all the difference to your experience.  Here are my top 5 tips for improving your profile:

  

1. Profile picture: no matter how camera shy you may be, having your picture on your profile does make all the difference!  It should be appropriate to what you do and should also reflect who you are and, who you are now.  A 20 year old photo of you might look good and be your personal favourite, but isn’t going to hit the spot when someone meets you face to face!
2. Connection strategy: A tough one! Some people take the view that more is better, some becoming a LION (LinkedIn Open Networker) connecting with as many people as possible (some have 1,000s of connections) with a view that, at some point in the future there may be a useful contact in there somewhere.  Bit of a needle in a haystack approach.  Others prefer to make solid contacts with people they have met, already know have been recommended to or by and build a smaller base of known connections.  It comes down to personal preference, but leveraging your connection base is a key LinkedIn functionality.
3. Testimonials: A key descriptor of your worth to potential clients is the strength of testimonials on your profile.  You can ask for these, either specifically or reciprocally, and the way you approach this is dependant upon your relationship with the individual.
4. Headline: Your headline is the first thing that a potential client, contact or referrer will see.  LinkedIn will automatically default to your last job title, which might be fine, but does that say what you would want to say about yourself?  A concise strapline describing your skills and attributes would be far better.
5. Public Profile: LinkedIn sets an automatic name for your public profile, usually a less than helpful one!  Using your Profile Edit section you can replace this with one that more accurately reflects your name.  I reset mine to http://uk.linkedin.com/in/paulwyoungman

Feel free to get in touch for further thoughts and advice on this or any of our other Bog topics.

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.

U is for...

Utilisation:

Utilisation of your space, that is.  Efficient space utilisation within an organisation can have a number of positive knock on effects.  There are the more obvious ones, those promoting operational efficiency and production and also those relating to staff wellbeing and personal growth.

The most radical change in the office based working environment in recent years has been the shift from individual working to collaborative working.  The practice of colleagues coming together to work for parts of the day in formal or informal work groups, far beyond the understanding of “meetings” has been on the rise.

Responding to this by addressing the look and feel of the office workplace has been a key step forward in both the promotion of the new styles of working and also the opportunity to contain and possibly reduce the cost base for the business.

Utilisation improvements can be brought about by the application of a number of techniques and principles, all designed to improve take up and application of spatial usage.

• 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.

S is for...

Social Media:

Social Media will continue to be big news in 2012.  As more people get to grips with their online presence and more businesses realise the potential for a new string to their marketing bow the battle for dominance in the social media marketplace will heighten.

There are over 200 social media platforms in existence and their individual customer bases are hard fought and hard won.  Many business professionals use LinkedIn (www.linkedin.com) to profile themselves, their experience and expertise as well as that of their businesses.  LinkedIn is sometimes referred to as the “FaceBook for business” which is a point of view, not necessarily one I would subscribe to, but it certainly has similar aims and allows users to have a similar experience.  With over 10 million users, (I don't know how many property professionals are on!) it is certainly worth considering your usage of this medium.

Many come to LinkedIn from a fairly low start point in terms of familiarity with social media, and “tweaking” the application and your profile can make all the difference to your experience.  Here are my top 5 tips for improving your profile:

1.     Profile picture: no matter how camera shy you may be, having your picture on your profile does make all the difference!  It should be appropriate to what you do and should also reflect who you are and, who you are now.  A 20 year old photo of you might look good and be your personal favourite, but isn’t going to hit the spot when someone meets you face to face!

2.     Connection strategy: A tough one! Some people take the view that more is better, some becoming a LION (LinkedIn Open Networker) connecting with as many people as possible (some have 1,000s of connections) with a view that, at some point in the future there may be a useful contact in there somewhere.  Bit of a needle in a haystack approach.  Others prefer to make solid contacts with people they have met, already know have been recommended to or by and build a smaller base of known connections.  It comes down to personal preference, but leveraging your connection base is a key LinkedIn functionality.

3.     Testimonials: A key descriptor of your worth to potential clients is the strength of testimonials on your profile.  You can ask for these, either specifically or reciprocally, and the way you approach this is dependant upon your relationship with the individual.

4.     Headline: Your headline is the first thing that a potential client, contact or referrer will see.  LinkedIn will automatically default to your last job title, which might be fine, but does that say what you would want to say about yourself?  A concise strapline describing your skills and attributes would be far better.

5.     Public Profile: LinkedIn sets an automatic name for your public profile, usually a less than helpful one!  Using your Profile Edit section you can replace this with one that more accurately reflects your name.  I reset mine to http://uk.linkedin.com/in/paulwyoungman

Feel free to get in touch for further thoughts and advice on this or any of our other Blog topics.

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.

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.

L is for...

Leasehold:

The occupation of commercial business premises by means of a lease from a private landlord or an institutional lease from a pension fund or similar is a well tried and tested method of getting the real estate you need to undertake your core business activities.

In recent years there has been a movement in the manner in which there leases have come to be drafted with, arguably, more flexibility being driven into the process by market demands.  The days of institutional leases of 25 years, with no breaks and upwards only rent reviews as the norm are probably no more, with the legacy if these practices of the 1980’s and early 1990’s hanging around for a few more years to come.

For most large organisations, the acquisition of new commercial property by this means is a well trodden path which holds no concerns or fears.  For those less experienced, here are my top 5 tips when considering this undertaking:

• Term:  The term of any lease and the potential for breaks (which must be able to be exercised by either party, not just the landlord) in that lease, must align with your organisational business plan over the medium to long term.

• Demise:  Make sure you are clear on what is included and what is excluded in the demise you are considering.  Favourites for unintended inclusion and exclusion are toilets and lifts (elevators for those in the US).  Both of these carry the potential for considerable maintenance and upgrade costs, make sure you know what else you are getting in your square footage!

• Total Costs:  As well as your rent, don’t forget that there will be other costs associated with taking over leasehold space.  Business rates are a given, and can be a significant expenditure item and also make sure you understand what service charge your landlord is proposing to levy and what you get for it.  There may be others too, some landlord are providing other services on an opt in basis, make sure you tick the opt out box if you are not going to use them.

• Legal:  Commercial leases are significant, weighty and binding documents.  Ensure that you have sought, and importantly listened to, professional advice about the lease you are about to enter into.  It is essential that the lawyer that acts for you is a specialist in the field and knows their way around the clauses that will be buried somewhere in the lease, ready to pop up at an inopportune time to cause you problems.

• Alterations, changes and dilapidations:  You have you new lease in place, you may even be enjoying a rent free period to fit it out to your requirements.  Make sure you know whether you need your landlords permission for those works, any subsequent changes, what process that permission will require to achieve and what your liabilities are in respect of dilapidations at the end of the lease.

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.

G is for...

Growth:

A few brief thoughts today on how your real estate supports your organisation in times of growth.

The key word in the previous sentence is the word support.  It was once commented that a £100,000 building will house £1,000,000 worth of equipment that will produce £100,000,000 worth of product.  The message being, that without the £100,000 shed the production is not going to happen.  In themselves the built assets do not form part of the core activities of you r business, but without them, or with the wrong assets, the business is not going to function in the correct way.

So, where is your £100,000 shed?  Is it the right size & shape, is it adaptable and flexible for your needs and, most importantly is it going to keep up with the business development that you have planned?

Regular review and assessment of the facilities you occupy will help you determine whether this is the case:

• Can developing new working practices and work patterns help with your business growth?
• Can your site accommodate new temporary buildings to address immediate requirements for additional accommodation?
• Do lease restrictions mean that your current facility will not, over time, be suitable for your purposes and is now the right time to plan to move?
• Will new compliance regulations in your business or industry mean that refurbishment is required?  Will this prove to be prohibitively expensive in the current location?

 You will be aware that property related transactions do not move too quickly and, sometimes, not too smoothly either.  Planning well ahead for your businesses operational real estate requirements will be key in achieving success.

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.

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.