London prime property recovers slightly - Plus a daily roundup of all the key property news
Posted by The Oracle Group on 6th August 2019 -
INDUSTRY
London prime property recovers slightly
Prices in London’s prime property areas are now 3.1% higher than they were at the end of 2018, according to the latest London Prime Property Index by private bank Coutts, which indicates that though sales activity picked up 21.4% on the previous quarter - the number of prime properties on the open market is down 12.5% on last year. Sales were concentrated in Mayfair and St James’s, while demand for family homes in outer-prime areas such as Hampstead and Wimbledon has remained strong. The number of property listings in Kensington, Notting Hill and Holland Park is 25% lower than a year ago.
FIRMS
Berkeley rethinks pay policy
Housebuilder Berkeley Group has scrapped its annual bonus. The new pay policy will see bosses hold on to shares earned through the company's long-term incentive scheme for an extra two years and re-earn any shares that have not vested through the scheme by 2021 over the following four years. Glyn Barker, head of Berkeley's pay committee, said the policy will encourage focus on long-term financial performance rather than annual figures.
Flexible office group eyes sale
A serviced offices group is considering a potential £200m sale. BE Offices, which runs more than 20 workspace locations nationwide, has appointed Rothschild to advise it on a range of financing options that could include a sale. The company offers flexible leases on a monthly basis and onsite facilities and operates four brands, including Headspace and Bespoke. A sale is expected to value the company at up to £200m.
Construction firm lauds contract wins
Aberdeenshire construction firm Bancon Construction has been boosted by new contracts worth more than £20m, including "significant" wins with multiple Scottish councils. The company hailed a string of new deals, including affordable housing agreements with Highland and Angus councils. Bancon has also landed a contract to convert the former Inverness College into a creative hub for the Highlands. The firm added that it is currently negotiating additional work with commercial clients.
RENTAL
Tenth of Edinburgh homes listed on Airbnb
More than one in 10 of Edinburgh’s city centre properties are being promoted on Airbnb. The number of lets from Edinburgh on the home-sharing site have doubled to 12,000 since 2016, which city leaders say is partly to blame for the loss of up to a third of the private rental stock in some areas. Experts have called for stricter regulation of the holiday-lets market, which does not have the same stringent safety checks as the traditional rental sector. “The problem is a complete imbalance,” Rob Trotter, a partner at DJ Alexander, said. “If the short-term market had regulations of its own, it would be an even playing field.”
Letting agent fee ban generates questions
Figures suggest tenants are still confused about the ban on letting agents' fees, which come into effect on 1 June. Enquiries to Citizens Advice rose by 54%, to 430, in the month after the law was introduced, while The Property Ombudsman received 68. The TPO said most had been from renters unsure whether the new law affected existing tenancies. The Property Redress Scheme estimated it had taken double the number of enquiries from tenants, as well as calls from letting agents checking they were implementing new rules correctly.
HOUSING
Social housing funding key to shortage
Kate Henderson, chief executive of the National Housing Federation, says that while a key way of ensuring that enough affordable homes are built each year to meet current demand is by reforming land laws to make land cheaper, this alone won't solve the problem. The Government urgently needs to commit more funding to build social housing, which has been drastically cut over the last decade. To build the homes needed requires £12.8bn each year for the next 10 years, Ms Henderson says.
RETAIL
Intu continues to tumble
Shares in shopping centre owner Intu fell by 7.1% yesterday to reach 40p. The firm has now lost 43% of its value in four sessions after warning that fast-declining rental income and property values could force it to raise equity. Meanwhile, rival Hammerson was down by 7.25p, or 3.4%, to a 19-year low of 206.75p.
Sports Direct wins race for Jack Wills
Sports Direct has won the bidding war for retail fashion chain Jack Wills. Jack Wills had been put into administration and was immediately sold to Sports Direct for £12.75m in a pre-pack administration. The sale includes all 100 UK and Ireland stores and stock, as well as a distribution centre, along with all employees.
REGENERATION
Historic buildings to be saved from disrepair
A new three-year pilot scheme launched by the Northern Ireland ministers aims to restore four of the 500 historic buildings across the region at risk of falling into a state beyond repair – while putting them into community control. Helping them is the Architectural Heritage Fund, which aims to find sustainable uses for buildings at risk in areas of deprivation. If successful, it is hoped that more money will be made available for further restoration work elsewhere.
LEGAL
Developers slammed over legal action against cultural venue
Organisers of the Edinburgh International Festival have accused the developers of a hotel and shopping centre of "sickening, disgusting" tactics to try to thwart its new venue. Director Fergus Linehan accused American property giant Nuveen, which is leading the Edinburgh St James scheme, of trying to "crush a cultural facility" by mounting a legal challenge against the £45m concert hall off St Andrew Square. Nuveen is seeking a judicial review of a decision to approve planning permission for the 1,000-seat Dunard Centre.
INFRASTRUCTURE
20 NHS building projects given green light
Boris Johnson has given the green light to 20 new building and infrastructure projects in the NHS in England. The £850m package will pay for new wards, intensive care units and diagnostic centres as well as refurbishing some existing facilities over the next five years. Mr Johnson also said there would be an extra £1bn this year to improve and maintain existing buildings.
£10m grant boosts Black Country railway project
Plans to construct two new Black Country railway stations have been boosted by a £10m Government grant. Under the project, passengers would return to Darlaston and Willenhall where original stations closed to commuters in 1965. The project is being led by the West Midlands Rail Executive and Transport for West Midlands.BBC News
New protection for Norfolk coastal homes
Some 400 homes at risk from erosion and flooding are to be protected by the creation of a giant sand dune on the Norfolk coast. It will be the first use in Britain of "sandscaping", a technique pioneered in the Netherlands to protect its low-lying coast.
HOTELS
UK hotels rake in record profits
The top 100 UK hotel groups saw profit break the £1bn barrier last year. Profit rose 83% year-on-year from £583m as the weak pound tempted Brits to holiday at home and overseas tourists to visit the UK. Revenue was up 1.5% from £6.8bn to £6.9bn in 2019, according to the latest research from law firm Boodle Hatfield. It also found that the budget hotel sector is now growing faster than the rest of the market, with turnover at the five leading chains increasing 7% in the year, from £1.7bn to £1.9bn.
Sir Stelios hits out at easyHotel offer
Sir Stelios Haji-Ioannou has hit out at a £139m takeover bid for easyHotel from a consortium of real estate investors. The cash bid, which has been recommended by easyHotel’s board, comes from a consortium made up of Ivanhoe Cambridge and ICAMAP, which currently holds a more than 38% stake in easyHotel. Sir Stelios, the chain’s founder and a 27% shareholder, described the offer as “very low” and has called on shareholders to reject the takeover “until the true value and future potential of easyHotel can be evaluated”.
ECONOMY
Services growth sees recession fears recede
Stronger than expected growth in the services sector means the economy is set to avoid a recession, offering a boost after contractions in the manufacturing and construction sectors. IHS Markit’s purchasing managers' index (PMI) rose to 51.5, marking the strongest score for the industry since October and an increase on June’s 50.2 on an index in which a score above 50 indicates growth. Combining all sectors the PMI rose to 50.7, up from 49.7 in June.
Sales growth down in July
Figures from the British Retail Consortium show that retail sales growth fell to its lowest level on record last month, hitting 0.3% in July. This was down from a 1.6% increase in July 2018 and represents the lowest rate for July since records began in 1995. While online sales of non-food items rose by 3.7% in July, in-store sales fell by 4.1% and food sales fell by 0.3%. The BRC attributed the month’s weak performance to "the combination of slow real wage growth and Brexit uncertainty".
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