Well it’s not surprising with 1 in 7 UK high street shops stood empty, the bad news for retailers is experts in the sector are predicting further closures as more consumers switch to online retailers. Last year the number of empty shops started to flatten out with just less than 15% or around 50,000 vacant commercial retail properties. This was not helped by a large number of high profile retailers going into administration. Yet again it is the high streets in the south that are bucking the trend strengthening the north south divide. Some of the secondary retail areas seem to be locked in a slow cycle of decline with the least attractive high streets with the lowest foot falls perhaps consigned to history. It is simple supply and demand with online sales doubling over the last decade. There is simply not the demand for retail premises that there has been historically. So what will happen to these empty properties? Some will be demolished and but others may be converted to other use classes, some lend themselves to services offices and others residential use. Clever property owners will look at their portfolio of commercial investment properties and look at conversion of the upper parts to maximise their rental income.
Renovation specialists Derbyshire
February 5, 2012
Derbyshire is very fortunate to benefit from an enviable selection of period property, Derby particularly boasts some of the best examples of Georgian period property outside of Bath and London. There are some very good examples in the various market and small towns of Ashbourne, Matlock, Bakewell and Melbourne. When restoring a period property it is all about the details, these are the things that the untrained eye will miss but can make or break the overall quality of a period property renovation. There is little point getting the sash windows mouldings and glazing proportions to match perfectly and then fitting the wrongs style or period of window furniture or hardware. Even with the brick work it’s not just the correct type of brick and mortar it’s the bond and pointing. There is no point in laying a perfect row of the correct bricks in stretchers with 15mm weather strike pointing. When it should be brushed 5mm English bond, so ask yourself a question before you hand over your period property or renovation project to a building contractor are they really period property experts? You will only have one chance to get your renovation project right and leave a wonderful legacy for future generations to enjoy. So take the time to make sure you have the right renovation specialists managing your period property renovations.
Commercial landlord’s dismay at governments “U” turn on pre-packs
February 2, 2012
Many commercial landlords feel that pre-packs are often used as nothing more than an accounting procedure to avoid paying thousands of pounds on lease agreements. The original plan was to give creditors three days to review information from the insolvency practitioners prior to the pre-pack going ahead. Many in the commercial property world had expressed concerns that three days was insufficient and a longer period was required. This proposal for a notification to creditors prior to the pre-pack has now been completely abandoned. It is the “Phoenix pre-packs”, that are seen by many in the property industry to be the sharpest practice, when a company is cut up and the most profitable sections purchased out of administration by a pre-connected party.
Commercial property set to recover in second half of 2012
January 27, 2012
Commercial property forecasters are predicting a revival in the commercial property sector later this year. They cite the Eurozone crisis as a delay to many companies expansion plans particularly in the London commercial property market. Many boards and directors are positive about signing new leases but are holding off. These decisions cannot be delayed indefinitely and analysts believe that many have held off expansion plans for as long as possible. Companies that are performing well are looking to be well placed for the recovery and will want properties in place to support their business plans. Some London post codes are seeing annual returns for commercial property of over eleven percent.
Commercial property transaction volumes drop by over 6% from 2010 to 2011
January 25, 2012
The values of commercial property transactions have dropped from just short of 36 billion to just less than 33 and a half billion. In 2011 there were just over 1700 sold mainly by banks or the customers of banks under pressure to stay within their facility agreements. University research estimates that a quarter of all commercial property has 100% outstanding property loans. They estimate that a further 35% are at 70% or more, this mean that 60% of all commercial property will not be re-financeable at the end of their facility terms. This has the knock on effect that banks cannot clear property backed loans off their balance sheets. So they have little or no appetite for speculative property development and new commercial property loans.
Construction industry sees 5,000 firms go to the wall since 2010
January 20, 2012
The construction industry has seen over 5,000 firms go into liquidation since 2010 and Pwc are expecting 2012 to be a similarly tough year. 2011 saw a 6% rise in insolvencies from 2010 with the final quarter seeing 656 construction firms fail. Many firms have been hit by a double whammy of a massively reduced speculative development and new build demand coupled with a huge slow down in public sector building projects. Interestingly as the market stalls and construction firms suffer from a lack of new tenders arriving at their offices. Other fragments of the construction and property market are seeing some increase in activity. With planning consultants and architects seeing a growth in those sat on land and disused buildings looking to maximise their value or prepare site for sale through value engineering.
What are planning conditions?
January 15, 2012
Planning conditions vary greatly dependant on the size and nature of the building project. Planning conditions are usually used to allow planning permission to be granted while smaller details are still to be confirmed and agreed. Brick sample panels can often be conditions that effects smaller projects like barn conversions and home extensions. They can cover almost any consideration that the planning officers of planning committee have concerns about from drainage schemes through to details of window design. So what if you get a planning application granted and it has conditions attached? Well you need to make sure that these planning conditions are “discharged”, at an appropriate stage of the project. Essentially you need to make sure you mitigate your risk by not carrying out building works that could be affected if there are issues obtaining a discharge of the planning condition. This could be as simple as the planning officer visiting site and agreeing a sample panel of brickwork. If you build out and the conditions are not discharged you could be ultimately faced with demolishing and rebuild!
Underpinning specialists Derbyshire
January 13, 2012
Underpinning is a word that strikes fear into many home and property owners so why? Because in many cases it can be a slow and expensive process, this is because it requires repair, replacement and upgrading of the original footings. Some structural issues relating to foundation defects can now be resolved through the use of piles or mini piles. So how do you know if your property requires underpinning? Often the signs are bulges and leaning to the brickwork or cracks particularly around window and door openings. One very important consideration is like your own health certain issues and symptoms require more immediate attention. So if you have any concerns about the need for underpinning you should contact a reputable structural engineer or building contractor that specialises in structural issues.
Property developers need to lead recovery with demand driven commercial property deals
October 9, 2011
Developers are more upbeat than they have been for years. Although residential house builders still have concerns that the sale prices they achieve could have a negative effect of their projected gross development values. The commercial sector is more positive as many believe we have reached the bottom of the property cycle and by the time they put deals together demand will have increased. The key to a successful commercial property development is recognising the new demands of commercial tenants and buyers. Many are looking for units with potential for expansion as the UK economy recovers that makes them better placed for investment and expansion opportunities. The lead time between acquiring sites or former commercial properties and redeveloping can often be years. So many of the old hands are trying to mimic the success of those that made good returns when they emerged from the last recession. The appetite of buyers for those sites considered secondary or challenging is massively reduced. This has lead to a change of tack with developers, many are turning to joint venture property developments as a way of spreading risk. Of course this also spreads profits but it means that those who are fortunate enough to have good war chests of cash can aggressively acquire discounted sites. Many of these sites are held by banks, asset management companies or developers who have lost their will to hold and are looking for liquidity rather than cash tied up in vacant sites.
Property companies share prices indicate future for investment property?
September 25, 2011
All shares have had a turbulent few weeks and property companies are not immune from market turbulence. The markets have rewarded those companies that have the safest of property investments long leases to blue chips in prime locations. Those companies who have a higher risk portfolio holding secondary and tertiary property holdings have fared worse in market losses. The markets are also looking at short income streams and leases as rents and ultimately capital values rely on tenant demand. The final item on the investors check list is imminent bank re-financing which in these times equates to increases in finance costs and therefore reductions in profits.
