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.

Belt Tightening in the West End:

Back in February we reported the increasing trend for the luxurious Georgian building of Mayfair and St James’s to be converted back into private residences (http://propertyforum.blogspot.co.uk/2012/02/home-office.html)

A recent report from our friends at Cushman & Wakefield now confirms this, and also raise an interesting question with regard to perceptions in these straightened times.  It would appear that now only 50% of hedge fund managers are based in the area, compared to over 70% 5 years ago.  The exodus away from the area to the more affordable and less extravagant Marylebone, Soho and Knightsbridge (really?) is continuing, they say.  With hedge funds losing 3% of their value last month alone, investors are, apparently, less impressed with the lavish offices and wish those managing their funds to have a more frugal presence.

One of the effects of this is to place upward pressure on the market in the area.  Rental levels on refurbished space in Mayfair are already breaking the £100 per sq ft level and, with a narrowing range of choice as new developments hit an all time low, there will be continual upward pressure on the limited vacant space available.

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.

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.

Business Impact:

Does your present portfolio of occupied accommodation have a positive or negative impact on the day to day activities of your business?  It can often be the case that businesses continue to occupy and operate out of facilities long after those facilities have served their useful purpose. 

Technological change, production developments, businesses processes and changed working practices can often leave the bricks and mortar way behind in terms of usefulness to the business.  But it’s not always easy to make the change and relocate.  There are many considerations; some more tangible than others and not all business owners are able to face up to them.  It could be that the lease still has time to run, or the Company has a long standing history at the location and it is loath to break that link.  Remodelling and reworking of the workspace may be a possibility, but what if the amount of space or its geographical location is unsuitable?   

Core business activity is the key, after all, the real estate is only there to serve the business purpose, so the questions to ask revolve around the key drivers and performance indicators in the business and their ability to be achieved.  Assessment and analysis of the built environment together with the business plan and programme will help determine whether your facilities are supporting your business or the other way round.

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.

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.

Battersea Update:

Following our blog post in December of last year reporting on the difficulties faced by REO, the owners of Battersea Power Station the administrators and receivers Ernst & Young have made a significant announcement today.

Malaysian investors SP Setia and Sime Darby Property have been confirmed this morning as the preferred bidders for the 38 acre site of the old power station in south London.

An exclusivity agreement has been entered into with the Ernst & Young, with a 28 day window to conduct due diligence investigations and contract negotiations prior to going ahead with the purchase of the site for £400m.

SP Setia and Sime Darby Property said that their plans “involve the development of a sustainable multi use real estate regeneration project that will provide economic impetus for the creation of a new vibrant centre for south-west central London”.

They have indicated that they will preserve much of the façade and the iconic chimneys and have also committed to construct a new underground station, forming part of the extended Northern Line.  This move is a key initiative in the success of the regeneration project.

There is much wailing and gnashing of teeth from Chelsea supporters this morning as Mr Abramovich and Co were also thought to be in the running for a shot at redeveloping the site.  They may be off for an early bath, but you never know, things can always change!