Commercial property blog

By Roger Southam

The fragile state of the economy is leaving everyone guessing on whether we will get a double dip recession or whether there will be a slow steady rise back from the abyss. Whatever happens, every economist will be claiming they were right – because they always do!

However this makes it very tough for the public to know what to do on buying, selling and renting. There are many hours being spent in institutions and developers contemplating the creation of a workable and sustainable private rented sector.

Now your initial reaction might be there is one. However, what we currently have is a very amateur, ‘kitchen table’ industry dominated by small landlords and a huge diversity of ownership. There are one or two exceptions such as Dorrington and Grainger but, by and large, residential rented property has never become an investment class in the way all other areas of property have.

So we have the prospect of dedicated buildings owned by pension funds and let out to the private rented sector. The needs and requirements will be different in terms of making sure they can extract a reasonable return on investment. But the biggest handicap is the wealth of legislation and the constraints imposed by conflicting legislation such as health and safety, employment and company law aside from the property laws.

So we have the prospect of an exciting 2010 in seeing what transpires and the hope that licensing and regulation can be enacted to replace the reams of legislation.

By Dickon Broadhurst

The Sudan Egypt border is bigger than simply the border between two nations, it represents the change from a mostly Arab and muslim Egypt to a country that is really an amalgamation of black Africa and the arab Middle East, both Muslim and Christian.

Ferry under the stars

The boat trip along Lake Nasa or Nubia represents a definite high point of my trip so far. Ignoring the ridiculous border bureaucracy at both ends combined with the frantic non-sensical African way of doing things, sleeping on the top deck of the dinky boat in the warm air under the stars crammed in amongst Arab and African traders, travellers, migrants, workers and a few travellers like us was a great experience. This Disney-like experience was only marred by the most degraded overflowing loo facilities I have ever encountered, where you are as likely to end up throwing up as well simply by force of smell. I departed resolute that with that barrier overcome I can do pretty much anything. Either that or I am slowly edging towards vagrant status. I made a mental note that my gung ho attitude to local water and food also has its unfortunate repercussions that manifested themselves on this particular boat journey.

George Michael, Michael Jackson, Boy Band....who knows, but its not good

I thought you might be amused by the photo here. My sensitivity to the sun thanks to my malaria pills combined with intense heat means that this was my current get-up. I look like a combination of George Michael in WHAM, Michael Jackson (one sock), a gangster (hanky tied round my leg representing my cru) and probably not very heterosexual. I can’t imagine what the locals made of me.

Despite its reported problems, Sudan is a lovely place. Admittedly, visually all I have been graced with is more sand, more rocks and more desert with the odd glimpse of the Nile…and life. Nonetheless, the people more than make up for it. We represent a curiosity, and the Sudanese have the cordial habit of coming over to greet you, having a short exchange and then leaving you to your own devices. Its so refreshing. The Sudanese would be masters of coffee machine conversation in an office. Many of the people have been well travelled in Europe and the Middle East either through politics, business or study which is pretty interesting. The cynic in me thinks that, given that many of the men wear the white muslim robes and hat, being seen to discuss your travels and business as well as flex your linguistic abilities with passing foreigners is an effective way of reminding those around you of your status, but I’m probably wrong. Either way, the refreshing good nature of the Sudanese is slowly knocking the British reserved and stand offish nature out of me. I anticipate that this will return in Ethiopia as I am informed that the constant begging and stone throwing (a consequence of previous Western aid policies) will bring the true evil in me. A Swiss guy we passed showed us the gash on his leg as a result of a large stone being thrown. Rumour has it that a previous Brit in Ethiopia adopted the policy of waving money and then clouting anyone who came close. I like to think that I have more tact than that so have invested in a huge bag of sweets that should act as a diversion while we make our getaway. Lets hope they are happy to accept sweets from strangers.

Lindsey hitting the hard stuff

....and where shepherds lead, sheep will follow

Departing Wadi Halfa in the north, we have high tailed it 260 miles over four days to Dongola and have discovered the joy of having a tail wind by averaging between 18 and 22 mph (we were as low as 8mph in Egypt)(max speed set by Duncan and Dickon is 35 mph….not that we would care or anything). This is also aided by the new road built by the Chinese (I think) which wasn’t there a year ago. I feel for those who went before us on the dirt tracks. We arrived in Dongola which is a pretty cool place. Everyone seems keen to help, including an English teacher who had an impressive grasp of a lot of anglicisms: ‘this is my gaff’, ‘bog roll’, ‘that’ll be five quid son’ to name a few. It was John’s birthday so we hit the town (??) in search of (gourmet) food (in place of beer…it doesn’t exist in muslim countries). Its safe to say that many chickens heroically gave their lives for a good cause, and the restaurant had nothing left to serve us by the end….an achievement I feel.

Blue Door Blue Man

A point of interest is that one western habit we haven’t been willing to drop is that of loo roll. The African method involves a watering can and…..well hands I suppose. You understand our stubborness to conform on this point. To this end, I trawled the streets in search of the marvel of modern civilisation…..no dice! My eyes caught a glimpse of both nappies and tampax and my mind wondered….but fear not, I managed to track down some Kleenex. ‘Bog roll’ does not exist in Dongola.

Duncan in the sun

So I managed to get out the football that my charity gave me and start a game with some of the locals. The presence of a football had the not unwelcome consequence of making us both the centre of attention and very popular. If I’m honest, we started with cricket for the sake of Ollie Broom, but moved to football for the obvious reasons that everyone knows how to play. I was reminded why I’m not an avid football fan saving my enthusiasm for international games not because there wasn’t much football at school or that I’ve never been to a game, but simply because I’m useless with my feet. Each time a 12 year old Sudanese kid beats me (many times) I am reminded of this unfortunate inadequacy and curse the Gods for making me this way. Oh for a genie in a bottle to provide me with gifted football prowess. Anyway, it was good to get involved with the locals and we have discussed a plan of trying to play in as many places as we can.
By the way, through the money raised so far, I have been able to provide an ITV programme called ‘Men Brewing Badly’ (with Neil Morrisey to be aired in June) with 100 footballs which they will distribute to those that need them during their travels in southern Africa which is great (and part of the money will go to worthy causes as well) so thanks for all your help. I am also hoping to provide lots of footballs to a charity called ‘Ticket To Ride’ based down in Cape Town which helps kids in the various slums in the area with teaching, sport and arts and crafts which is really cool, so keep the sponsorship coming.

As I write this (in my notebook) I am lying in my sleeping bag under the stars in the middle of the desert. We were priviledged to witness the sun and full moon rise in impressive unison at opposite ends of the horizon. Both seemingly perfect spheres, they dissappeared and appeared as if my perfect design, as told in children’s fairtale stories. I imagine that only in the flat desert such as this that such sights are possible. The sun cast an incredible orange and red across the sky for a good hour, encouraging us to continue cycling into the night singing Blue Moon and Moon River much like the sirens of The Odyssey (see video). I would say that ‘red sky at night is the shepherds delight’, but then I’m in the damn desert, so damn hot and damn sunny is bit of a foregone conclusion. Anyway, I’ve learnt to take photos at night, so have included a few.

Dinner preparation

Whats that...

...is it a ghost

Goodnight Lindsey

By Claer Barrett

So-called independent financial advisers have been given a roasting in the press this week – and most of my contacts in the property world are secretly rubbing their hands with glee.

Why? They believe the ‘independent’ credentials of IFAs are compromised by the commission they receive when recommending certain investments.

Bricks and mortar property funds (shorthand for authorised property unit trusts and investment companies) are a case in point. Could the fact that IFAs receive commission for selling them explain their huge popularity with the man on the street?

Retail investors ploughed £511m into property funds in December.

This beat November’s record property inflow of £417m hands down, according to figures released earlier this month by the Investment Management Association.

Sure, the commercial property market is recovering – but are these funds Continue reading »

By Mark Rigby

We’re all familiar with this theory, but, talking purely rugby, I can assure you it’s no theory – it’s fact. Possession counts for nothing. Territory, nothing. It’s points that win you matches and, to score points, its all about execution – making and taking your chances.

The ‘stat’ boys can shower a load of numbers around about the time England spent holding the ball, how many tackles they made, how many more the Irish made but, cliché time I’m afraid, the scoreboard never lies. Ireland were mean, professional, efficient and ruthless in taking points. England were not. Story of the game in a nutshell.

What worries me more is progression. A lot of us have been pondering this for a while. Is this England side actually building towards anything? Are there signs of progress? We have all heard Johnno talking about ‘needing time’ and Andy Robinson before him was a broken record on that subject. The trouble is I’m not seeing any development. Worse still, I’m not seeing a game plan either – and neither were those around me on Saturday as we watched the Twickenham game up in Leeds ahead of our Wasps fixture.

In 2003, there was a real sense of England reaching the pinnacle of that side’s journey. For two to three years, those players and that staff had been building. You could see it happening, feel the progress and, ultimately, there was a real sense that that World Cup was the moment for the side. Destined but worked for – and achieved. I’m not getting that with this England side so the only conclusion that’s left is that something has to change, whether on or off the pitch.

Let me also say a word about the players so that we can be clear about their preparedness for the game. Today, England-contracted players are exceptionally well looked after. They get plenty of rest, they get outstanding medical and fitness support, and they have plenty of time with the England coaching set up away from the clubs. From our Wasps squad, many would argue the England players are the best rested of all! They simply aren’t experiencing the weekly biff and grind of the Guinness Premiership and all of its attrition. The clubs are doing a great deal to facilitate the national side and, to cut to the heart of the matter, something is going wrong with the national set up. Results and performances make the argument for you.

All credit to Ireland, however, they played strong rugby, took their chances and minimised mistakes. They are getting streetwise after all!

Over in Cardiff, it was the French victory I predicted (my one from three this week!) and the visitors did it without having to hit top gear. Wales cut their own throats by conceding unnecessary scores and, once again, forcing themselves to play catch-up rugby. You can’t give a side like the French a jump on you like that and expect to get a result. Interestingly, Sean Edwards told me that, of some 27 tries that Wales have conceded in the last 18 months, one third of them have been interceptions. Now, that suggests someone’s trying to force the pace too hard and that’s what Wales paid the price for last Friday.

As for Rome, well I called a very tight win for the Scots and this fixture was always going to be in the balance. Well done to the Azzuri. They did the job and came away with a win few would argue their hard work didn’t merit.

I tell you what – and to borrow a phrase from an old friend – it’s going to be one hell of a humdinger at Murrayfield next time out!

Strike rate: 5 from 9 – it’s tougher this year!

By Giles Barrie

Come on Qataris and Candys – settle your differences today.

I say today because Qatari Diar and Christian Candy’s CPC Group are going into a one-day mediation session this morning that could prevent their Chelsea Barracks dispute going to court.

And about time, too.

Last week’s Sunday Times revelations about the full detail of Prince Charles’s intervention at the Barracks are only the start of the potential embarrassment for the State of Qatar.

To recap, Qatari Diar and CPC Group teamed up to pay £959m for the Chelsea Barracks site at the peak of the boom.

Qatari Diar then bought CPC Group out, retaining Candy’s company as development manager for the Rogers Stirk Harbour-designed scheme.

Then well-heeled local residents started to revolt – and there is a suspicion that this was as much about new affordable housing on the site as about its design – and the Prince stepped in.

In a letter sent last March to Prime Minister of Qatar and Qatari Diar chairman Sheikh Hamad bin Jassim, the Prince confessed that his `heart sank’ when he saw the scheme.

Just before the project was due to go before Westminster planners the Qataris withdrew the scheme, leading to CPC’s claim for £81m due to alleged `unilateral and wrongful’ breach of contract.

Which brings us back to today’s mediation.

Speaking to top London planning experts last night, I was told there was a 70-30% chance that the original modernist Chelsea Barracks scheme would have been approved.

Experts say it was a high-quality design, and it would have been very hard to refuse on aesthetic grounds alone.

Likewise Mayor for London Boris Johnson, despite some misgivings, was unlikely to have been able to overrule a consent just because it wasn’t his cup of tea.

I understand there is a clause in the original contract which allows the Qataris to settle any such dispute with CPC at a cost of £69m, which CPC would also have to accept.

That would be one answer: the alternative for the Qataris to tough it out and go to court on May 17-21.

They would be mad to do this, not just because they would have a real battle on their hands, but because of the wider reputation of Qatar in the UK.

What does Qatar want? To be associated with visionary new designs which I understand will be unveiled shortly after Westminster elections on May 6?

Or to be the subject of a sorry court case that will embarrass both the Prince of Wales and the Mayor for London at about the same time?

By Roger Hollis

Early-rising listeners to The Today Programme this morning will have heard the segment looking ahead to today’s interest rate decision and what course of action would be best for UK Plc.

Fathom Financial’s Danny Gabay made the case that not only had historically-low interest rates of 0.5% saved us all considerable pain, but continued to be necessary if the UK was to avoid another worsening of economic conditions.

However, Dr Peter Warburton of Economic Perspectives feared that such low interest rates, especially when combined with the £200 billion programme of quantitative easing, provided “a threat of persistently higher inflation”.

Only time will tell which of these views is correct – although the MPC’s decision to hold interest rates at 0.5% certainly suggests they agree with Danny Gabay – but are there wider risks to the housing market with both proposed routes?

Something that the Bank of England has been criticised for is the age of cheap money in the years before the crash, leading to a property bubble that proved to be toxic for nearly all involved.

Could it be that the same is happening now? House prices may have dipped slightly in February, but prior to this they had grown every month since June 2009 and are now around the same level as in August 2008.

But is the threat of a property bubble significant enough for interest rates to be increased? Such a move, if premature, could be disastrous for consumer confidence and effectively kill off any recovery before it has properly taken root.

Yet again the connection in the British public’s mind between rising house prices and actual wealth is causing headaches for the MPC as it looks to find the safest course through the current troubles.

A move to a renting society such as Germany – where peaks and troughs in property prices are much shallower – may be the only way for such a connection to be broken.

And for that Mervyn King and his fellow MPC members would be forever grateful.

By Roger Southam

One can only imagine the huge shock to come home and find your beloved nest has been destroyed. This is what occurred in Camden last week and it really highlights the pitfalls and bear traps of homeownership.

Two neighbours own flats in a converted Victorian semi-detached property where a developer started work in the adjoining property without planning permission. His work has caused devastation and he wasn’t supposed to be doing it.

The families are left unable to live in their homes but the mortgages keep running. This is where the law turns into a minefield in terms of getting satisfaction and resolution without cost. The obvious answer is for the families to sue the developer but they could end up out of pocket on fees and costs when, regardless of liabilities, they are the innocent party.

Unfortunately this is by no means unique. I am involved in a block of 13 flats in Battersea where the catalogue of misfortune is beggar’s belief and the flat owners are staring at a £500,000 bill to rectify what the developers should have done. All the while they are racking up costs with no certainty of getting their money back and we have to throw more money at the problem to even stand a chance.

So there will never be easy answers or solutions. If someone wants to do something and flout the law then the innocent need protecting and miles of legislation will not make that easier or more helpful.

By Giles Barrie

I find the BBC a complacent, arrogant and self-satisfied organisation affecting three big parts of my life.

In media it is a self-serving, smug and over-staffed bureaucracy rammed by people who think they know best – but who could learn a lot from newspapers and magazines.

In property the BBC was last week proved again to be ill-qualified to spend license fee payers’ money, with the National Audit Office this time getting laid in.

And thirdly, my brother is a successful producer on Panorama – more of which later.

First, media: today BBC director general Mark Thompson revealed that the Corporation is going to close BBC 6 Music, the Asian Network and half the pages on its website.

I don’t know anything about BBC 6 or the Asian Network, but shutting down half the website cannot come too soon.

The damage it has done to local newspapers – an incredibly important part of any community – is incalculable.

Go on to the BBC site today, and under Highlands & Islands news you will find the electrifying `Weaver training to help industry’.

This tells us that `12 people are to be trained as weavers of Harris Tweed.’

You can also find out how a `Broadford-based otter charity is helping two missionaries in the Congo care for an abandoned cub.

And, how a comic book fan `is to embark on a journey from Kent to the Highlands for the north’s only comic convention’.

What on earth is going on?

Remember that the BBC is not free: it costs you £139 a year and categorically should not be producing this rubbish, preventing as it does the viability of decent local news.

Now on to property.

In assessing London’s Broadcasting House, Glasgow’s Pacific Quay and the Salford Quays project, the NAO says `the BBC is not well-placed to demonstrate value for money from £2bn’.

Compare that with the rigour, not to say pain, that the whole of the private sector has demonstrated in the last two years and the mismanagement of the London project beggars belief.

It will eventually cost £55m more than planned – simply due to the BBC’s slipshod project management skills.

The good news is that Salford Quays will be £74m under budget, and in this recession, so it should.

Finally, my brother Patrick, who is ferociously loyal to the BBC.

He doesn’t see that while he slaves away on brilliant investigative journalism, the Fat Cats at the top of the organisation are lapping up all the six-figure salary cream.

More than any other organisation in the public or private sector, the BBC needs to use the recession to quite simply GROW UP.

By Mark Rigby

Bullying, clunking fists, inflexibility and a relentless demand for the highest standards.

Sound familiar? Yes. What’s alleged in Number 10 is, in a manner of speaking, par for the course in rugby.

Gordo or Johnno, there’s not a great deal of difference in the approach. But whereas in rugby that ferocious desire to succeed and the tough men that nurture it see it as part of the culture, it’s a different story in the Civil Service.

I’m not drawing any conclusions here – and I’d call it tough love in rugby not bullying – but it’s an interesting parallel for two leaders under pressure and two men trying to get the most out of their teams.

I’ve had a lot of time to think during the last week. Five days in the saddle from Nice to Paris on the Dallaglio Cycle Slam (thanks Mr G for your donation and, if anyone else would like to, please feel free to donate at http://www.justgiving.com/riggers7) – most of it in the tipping rain – means plenty of moments for reflection and it’s only after a good deal of thought that I’m backing England to win on Saturday by less than five points.

Why? Because they’ve got momentum (something you learn a lot about in long-distance cycling!).

That, together with home advantage, will make the difference between two otherwise evenly matched sides.

I can’t point to an area of particular weakness or strength between the teams. Both solid, both well equipped, both with a depth of experience and talent.

But whereas England are two from two, Ireland have just been kicked in the teeth in Paris – completely outplayed some would say – and they didn’t do a great deal to inspire confidence in the opener against Italy.

I’d say Twickenham is the last place O’Driscoll and his men would want to come right now and, although I respect the old adage of fearing a team on the bounce, I’m backing England.

I’m backing Jonny too. England are a stronger team when he starts. I’d like him to play a little flatter on Saturday and focus on simple ‘heads up rugby’ but I’m glad he’s got the 10 shirt. Tasty too that he is going up against young Sexton. The Sorcerer and the Apprentice!

Flipping across to Friday night and Cardiff, if Wales have got any more ‘Get out of Jail’ cards left, I want the version of Monopoly they’re playing with!

Their last gasp brilliance against Scotland was wonderful to watch but a disaster too. They allowed themselves to get into that position and they were very lucky to get out of it!

With France in town – and Cardiff a pretty happy hunting ground for them – it’s a question of French tails up and a wicked 80 minutes ahead for the men in red. I’m calling France by 10 or more. Too much beef – bit ironic that – and too much capability right across the park. Good luck Wales, you’re going to need it.

In Rome, it’s wooden spoon time I’m afraid.

Similar to Twickenham, I see these two sides as evenly matched and a tight game in store. The Scots have been putting down some markers about running back kicks and mixing it up and that would be great to see.

More likely, I fear, will be two teams desperate not to lose and wracked by fear of mistakes. Come on Scotland, show us that ambition! I’ll tip you to win by three if you do!

Lastly, a word on a great young player I know well and someone who, the last time England hosted Ireland, lit up Twickenham – Danny Cipriani.

Personally, I get where Danny is coming from. All of us at Wasps are sad to see him leave but, having spent a season down under myself (I spent a year at Hawkes Bay in New Zealand), I know just how fulfilling it can be and what it can do to broaden your experience and your game.

Now I’m no Danny Cipriani, but Johnno did this too and it has a lot of sense about it. Danny will be playing in the Super 15 where his skills will be to the fore and, if he’s back in two years as we hope he will be, I’d wager he’ll be smarter, wiser, more effective and a better all round player.

At just 24 years old, that would be a great place to be – and a platform from which he could kick on to 50 caps and beyond. Who knows? Good luck to Danny – and I just hope the young Sexton doesn’t have the impact on this fixture that he had in 2008!

Let me know what you think. Now the bike’s back in the garage, I’m all ears!

My calls for this week:

England to beat Ireland by less than five points.

France to beat Wales by more than 10 points.

Scotland to beat Italy by three points.

By Giles Barrie

That was awful. Running up Tower 42 for today’s Vertical Rush was a lung-bursting, gruesome but ultimately rewarding experience.

It is hard to explain how tough the 920-stair challenge is: you start by running and then by floor five the awful truth dawns: it is going to be much, much tougher than you think.

Round and round you go, gripping the railing, moans and groans echoing around the early 1980s stairwell.

The odd person doubled up and wretching, most people in their solitary hell.

Get to 14 floors – a third of the way.

Get to 21 floors – halfway

Get to 32 floors – ten to go.

Encouraging ladies tell you that you have passed the height of Battersea Power Station, passed the height of the Gherkin, and you finally know you are nearing the end of your personal hell.

And at the top: nirvana.

A bottle of water, wonderful views over the City of London, esprit de corps with my colleagues Jacqui, David, Nick, Mike, Richard and Matt – and we are there.

Full marks to organisers Shelter, Hermes and Blackrock for what has quicky become a key Square Mile event.

More than £180,000 is expected to be raised, and I am looking forward to handing out the `Fastest Property Team’ prize tonight.

I’ll be getting tucked into the champagne as well – and I reckon I deserve it.

Look out for David Doyle’s film on the Vertical Rush any day, and more coverage in the March 5 and March 12 Property Weeks.