Edward Cooke on Retail property - estatesgazette.com

The end of Retail Property but more on Attention to Retail

2013-01-29T12:17:05Z

Ed and the team are no longer contributing to this blog. Thank you to everyone who has followed it over the past few years. For the latest on retail please follow Attention to Retail, where Ed will also be an occasional guest blogger.

Many thanks,

The Estates Gazette team.

Transport is not just about getting from A to B

2012-08-16T14:25:25Z

Helen Drury, Policy Advisor at BCSC, discusses the ramifications of increasing rail fares.

With the closing of the Olympics on Sunday, we seem to have definitely returned to pre-games life. On my commute into work on Monday morning, there were glum faces galore and a chaotic train service. The Olympic hangover has certainly set in.

However, announcements this week go beyond the resumption of service as normal - normal for the UK anyway. Last week the announcement of greater investment in the rail network was welcomed as a way to improve service, help the economy with better transport links and the environment with low-carbon trains. This week, however, we have found this investment comes at cost to commuters, as government subsidy will decrease. At a time when purse strings are extremely tight, with wages falling in real terms, this will squeeze people even further when the 11% increase comes into effect in December this year.

While there is promise of improved service and sustainability of train services, this will not outweigh the impact on commuters. In addition, no matter how sustainable the trains are, if people are choosing the cheaper car alternative, this will in fact increase emissions. In fact, as fuel duty rises were scrapped last month in the infamous omni-shambles incident to help hard hit commuters, it gives the signal that this government is not the greenest ever, nor does it even to pertain to be anymore.

Sustainability of course encompasses not only the environmental aspects, but society and economy as well; and the impacts on these are perhaps greater than the environmental implications of people using their cars more. If people are priced out of using the train network, social exclusion will increase and social mobility will decrease. The Campaign for Better Transport has shown that towns and cities with good rail networks thrive more than those without as they have higher densities, bringing economic benefits as retailers service these populations.

So the Government needs to look at the bigger picture - rather than just the revenue gained from higher fares - of a Britain where rail is supported as a primary transport method, bringing together cities and increasing social mobility. If Osborne can make cuts for fuel to help commuters, it is even more important that he does it for rail travel too.

Olympic sustainability and its legacy

2012-08-01T16:33:28Z

Helen Drury, Policy Advisor at BCSC, assesses the legacy of London 2012.

Last Friday saw the opening of the London 2012 Olympic Games with a spectacular show by Danny Boyle. Spirits are high for British medals, especially after winning our first two gold medals in the rowing and cycling today.

Our aspirations for our competitors are certainly high, but how about the ambitions for the London 2012 Games to be the most sustainable ever?

The Olympic stadium stands on what was some of London's most degraded land and contaminated waterways. In the run up to the Olympics, great efforts were taken to remediate the land; the stadium itself is mostly made from recycled materials, renewable energy is being used to power the stadium and there is a zero-waste to landfill policy.

Sustainability does not just mean green though; it also encompasses economic and social improvement as well. Certainly the increased number of visitors will help to boost the economy in the short term, and hopefully into the long term with increased tourism. Local Authorities have also been getting in on the action, hosting Olympic events, community parties and sports schemes at schools and leisure centres.

I have been impressed with the use of the existing infrastructure in London, with the three day eventing seamlessly slotted into Greenwich Park and the cyclists winding through South West London to the finish at Pall Mall. But this isn't only special to London, the sailing is taking place at Weymouth Sailing Pavilion and will hopefully drive tourism to the area in the future as it has been showcased across the world with the coverage of the Games.

Undeniably, the ambition for sustainability this year has set the bar for future Games very high. Success, however, ultimately depends on the legacy and how much the spirit of the Olympic Games is passed through to lasting change in the UK. A legacy strategy has been in place since 2009 and there are high hopes for the success of this; the athlete's village will be converted to housing following the Games and the park will be converted into a landscaped park for Stratford residents. What I think will be most interesting to see will be how much the sustainability of the site itself inspires other areas and businesses in the UK. In particular, East London's economy will undoubtedly benefit in the long term from such vast capital investment - including the new sustainable Westfield Shopping Centre - and four weeks of incredible showcasing. Will this area of London become a bubble of sustainable design and living?

They're here: the 2012 Olympics

2012-07-27T09:47:40Z

Davinder Jhamat, Head of Research and Education at BCSC

So they have finally arrived - the Olympics. With all the recent documentaries on TV, particularly the Olympics' Most Amazing Moments, the fastest man on the planet - Usain Bolt, the BBC evening news coming live from the Olympic village and more, with all the excitement getting a tad too palpable, something struck me.

There is a long list of male athletes (not necessarily Olympians) I can name as being the greatest athletes of all time. To name a few:

]]> - Muhammad Ali
- Aryton Senna
- Usain Bolt
- Roger Federer
- Steve Redgrave
- Pele. Let's not even begin on the rest of the Brazilian football team - it's a list of its own!
- Chris Hoy
- Maradona. Messi in due course will have his place in sporting history. Excuse the bias.
- Haile Gebrselassie
- Daley Thompson
- Michael Johnson
- Michael Phelps
- And others, though it pains me to say Tiger Woods.

The list goes on for the men. However, upon deep contemplation I am struggling with the ladies. To name a few are:
- Nadia Comăneci - Romanian gymnast to score the first perfect 10's. A true inspiration for me though my attempts to follow suit were quickly shortlived.
- Martina Navratilova
- Steffi Graff

And that's where I become stuck. I can't even name five women! However, I am confident there are others and am currently scouting other sports.

So here is a shout out for your recommendations in padding out the female list. Remember it's a list of the greatest athletes that have lived and not just any athlete. And just before it gets too competitive, ladies and gentlemen may I iterate it is not a 'them and us' issue - it's about bringing knowledge to the table.

So as we clammer to grab the best sofa seats, I really hope that these games live up to expectations. I for one will be following track and field, gymnastics, diving, boxing, judo, weightlifting... guess that's the whole of August written off for me!

The social responsibility of property ownership

2012-07-25T13:26:40Z

Shopping centres are large assets, more often than not in town and city centres (contrary to popular belief and press commentary). They are essentially businesses that require constant investment. Indeed, secondary shopping centres need substantial new capital merely to maintain their appearance and retail offer, and even more is required to turn them around. BCSC has been talking about the importance of value-added asset management skills as paramount to improving, and indeed maintaining value since we started exploring the impact of economic conditions (and round 2 of recession) since 2009. Through our work we established that of the c 820 shopping centres in the UK around 155, or 1 in 5, were at risk of defaulting on loans provided by banks to purchase these assets, which by our estimates was just over £10 billion worth of shopping centres.]]> Due to continuing global economic malaise (highlighted by today's disappointing GDP figures) IPD capital value figures, biased towards prime stock, show values are still c 35% lower than June 2007, and thus we believe our prognosis has not improved one jot. Values will not improve by magic without, for example, investing in a building's fabric, tenant incentives to secure the right operators, re-gearing leases, reconfiguring space and establishing development opportunities or investing in marketing.

What the whole debate about the future of the high street has done is to focus the debate less on the impact on the investor or the retailer but more on local communities. Neglected or under-managed assets undermine the overall perception, health and environment of a town centre, creating a disincentive to visit and ultimately leading to a migration to consumers quickly followed by businesses. Dare I say it this is much more of an issue for shopping centres than other real estate class. They are at the heart of local communities and their appearance is a very visible illustration of the success of failure of a town or city.

Through our campaigning on the Portas Review we have led the establishment of a Distressed Retail Property Taskforce and I'm please to say that from central and local government to large investors in retail property have all agreed to come together and establish how industry working in partnership with the public sector can get investment back into these places, despite the difficulty, and risk, in doing so. Ultimately we all recognise that doing nothing is not an option, as we strongly believe this is one of the biggest issues we face as an industry today and a fundamental issue that needs to be addressed to revitalise the high street and critically the communities they serve.

This issue is being debated by a panel at BCSC's Conference and Exhibition between 10 - 12 September this year.

Significant Barriers to Energy Efficiency Improvement Remain in the UK

2012-07-19T14:28:49Z

Helen Drury, Policy Advisor at BCSC, outlines the obstacles preventing greater energy efficiency in the UK.

Amid the recent omni-shambles of government u-turns, delays in announcements on renewables policy and a re-defining of a green tax, it seems to me that George Osborne is actively trying to kill the Green Economy.

In a report published this week by DECC and undertaken by McKinsey, significant barriers to improving energy efficiency in the UK have been identified.

While there is great potential for improving the building shell of commercial buildings, significant barriers to uptake remain.

For me, two points from the report really stuck out: Firstly, the complex and constantly evolving policy landscape is having little impact on realising the potential for abatement; and secondly the split incentives for landlords and tenants are causing significant barrier.

The UK climate change policy landscape is constantly evolving and is seen as overly complex by the respondents to the research. Government policy interventions are falling short of its potential. For example, for building energy efficiency, policy is expected to only deliver 3% of the potential. At the same time, it is estimated the CRC will only deliver 1TWh of the 57TWh efficiency savings potential in the commercial sector. Businesses want certainty, but they also want simple policy drivers that they can understand.

The report also shows that government still has not got to grips with the more complex nature of energy use in the retail property sector where the majority of commercial property is leased (61%). At the same time, with payback periods for energy efficiency improvements averaging 5 years and investments decisions typically made for a 2 year payback, there are issues around incentivising the upfront cost. This compounds the issue of a split incentive as businesses are less likely to invest in long payback improvements that they do not directly benefit from.

The government must take these messages on board. We have been calling on government to simplify this complex and confusing landscape. A first step will be for the Government to replace the CRC with a simplified tax and combine this with GHG reporting which will increase awareness at the board level.

Airports, Expansion and Retail - Who's Jetting Off With the Consumer?

2012-06-25T10:06:02Z

Davinder Jhamat, Head of Research and Education at BCSC, questions whether Heathrow is being left behind by its European competitors.

Over the last couple of months I have been following the Heathrow airport discussion with interest. Contention over Heathrow's extra runway and the fact that by the turn of the decade Heathrow will lose its competitive position as the top global airport. COMAC, China's biggest aerospace company is choosing to base its European headquarters in Paris rather than London because of the French capital's better air links. Tourists are choosing other destinations to holiday as Heathrow is proving challenging to access. London has a lot to think about.

A few weeks ago I was reading in the Evening Standard about Richard Solomons, Chief Exec of Intercontinental Hotels, who was quoted as saying that the Germans and French are "running off with customers". Germany has nine times the number of Chinese visitors compared to the UK. France has six times. So what is the problem? According to Solomons it is not just an accessibility issue at the point of entry into a country, but a visa and security issue which the UK has fortunately / unfortunately got plenty of (depending on where you sit on this matter).

With the Olympics just around the corner, it will be interesting to see how things pan out. One suddenly shivers at the thought of our guests arriving at Heathrow and being stuck in customs for hours - and that's before they even tackle the London tube system. The press, I suspect, will have some fun with this!

On a positive, Birmingham International Airport is on the other hand extending its runway. And in supporting the impetus, recently the Chinese firm NVC Lighting Limited, a subsidiary of China's largest lighting manufacturer, is expanding its UK base near Birmingham. Accessibility has a lot to do with it according to the firm.

A Tale of Two Cities on the issue of airports. One city is losing its competitive advantage; the other benefitting and bringing new business to town. Whether accessibility is a point for businesses or tourists, both are customers of the UK economy and consequently our retail sector. The concern is that we could / are driving business away unless this point is dealt with, particularly for London.

I wonder if Heathrow will do an exit survey in acquiring customer feedback as they leave the Olympics and how the debate will take shape thereafter. There is not an easy win on this, depending what side of the fence you stand on. But the equation is simple:

Tourism / International Business = Retail = Jobs!

Industry welcomes move to GHG reporting

2012-06-21T15:18:26Z

Helen Drury, Policy Advisor at BCSC, comments on Nick Clegg's long awaited announcement.

At the Rio +20 Earth Summit Nick Clegg yesterday announced the intention to make GHG reporting mandatory from April 2013. This has been a long awaited announcement following a consultation in June last year. At the time, there were mixed views from stakeholders on whether the government should mandate on GHG reporting and what followed was a year of behind-the-scenes negotiations and detailed assessment of costs.

The announcement was broadly welcomed yesterday with a growing number of groups, BCSC included, welcoming the decision as a step in the right direction of managing GHG emissions and raising awareness. There is a also a growing consensus that the introduction of mandatory reporting now further makes the case that the CRC should be replaced with a simplified environmental tax, possibly through the Climate Change Levy (CCL) and complemented with GHG reporting instead of a Performance League Table.

So, now the announcement has been made, what does this mean for business? At the moment, only companies who are listed on the London Stock Exchange are required to report on their GHG emissions in their annual reports to Company House. Defra will then review the case in 2015 with a view to extend the regulations to all large companies in 2016. This seems like a sensible approach to me as listed companies are likely to already be reporting and will be able to disseminate best practice to large companies as they are brought into the mix.

It is not yet clear exactly what the reporting requirements will be, but looking back at the Defra consultation proposals from last year, it is likely the following will be need to be included in the report:
•   Organisational boundary, but it is still unclear whether type of boundary setting will be flexible or stipulated
•   Overseas emissions, in order to limit 'off shoring' of emissions
•   The six Kyoto Protocol gases
•   Scopes 1 and 2 but not 3 which is recognised as being significantly more difficult to calculate
•   An intensity ratio of your choice
•   The report will need to be included in Director's report of the annual report
•   The methodology used for data collection

Defra will consult on the Draft Statutory Instrument ahead of the implementation in April 2013.

What is the future for Secondary Shopping Centres?

2012-06-08T10:47:54Z

Alistair Johnstone, Associate Director at CBRE Ltd, discusses the issues facing Britain's Secondary Shopping Centres.

"Polarisation" and "lack of prime stock" are two current and commonly used terms across the commercial property market. In terms of shopping centres the former is certainly true. The latter has some truth but recently we have seen some action; Witney, Basingstoke and Meadowhall are each very different animals but to varying degrees are considered prime and show conclusively that if a scheme ticks the right boxes there remains a good depth of interest.

Where a scheme falls short and becomes more secondary the world is a very different place. Of course "secondary" describes a wide range of quality but even at the upper end of the scale, investor interest is weak. There is no shortage of recent examples where centres have been brought to the market but subsequently been withdrawn with vendor and purchaser expectations sometimes miles apart.

Polarisation is no surprise in a market downturn but there are additional reasons why it is so extreme in shopping centres. A number of factors over the past 25 years have permanently changed the landscape for shoppers and perhaps go some way to explaining the divergence. Starting with super regional shopping centres (the first being The Metro Centre in the mid 80s), then larger format American style supermarkets (pioneered by ASDA and Tesco in the mid 90s) and most recently the growth of on line sales have all lead to increased competition for consumer cash, as recently set out in BCSC's empty shops research report. Shoppers appear to have embraced the convenience of these new offers and thus far a big casualty is local secondary centres.

Retailers have responded with a move from high volumes of stores throughout the UK to concentrating and consolidating their stock into larger modern formats where trading remains strongest. This trend is being particularly highlighted by the ever increasing number of tenant administrations: Peacocks, Barratts, Game, TJ Hughes, La Senza, Millets/Blacks and Habitat to name but a few have all entered insolvency and left a trail of vacant stores in their wake. This has affected both prime and secondary schemes but the depth of tenant demand for stronger centres means that void space can be re let quickly, whilst in contrast, secondary schemes are seeing ever increasing vacancy rates and falling rental values.

If I was inclined to take an optimistic view then I'd say a new type of retailer could be just around the corner. Mobile phone shops, coffee shops and pound stores have all at one stage exploded onto the scene at unanticipated levels. Further a number of internet retailers, such as Amazon, are exploring the possibility of opening local click and collect style stores. Whilst still new territory, this seems the most promising opportunity for a secondary shopping centre fight back. However the pessimists amongst us will continue to preach the Armageddon scenario whereby the changing retail landscape has driven an oversupply which will never be satisfied and new entrants will be heavily outweighed by tenant administrations.

Polarisation of investment markets looks set to continue, with foreign cash that sees the UK as a relative safe haven chasing a limited level of prime stock. Conversely, would be purchasers of secondary centres are taking a wait and see approach and unless forced sellers come to the table it's unlikely there will be many transactions. The real uncertainty is the longer term future for secondary schemes especially as vacancy levels continue to rise. Could it be development to meet modern retail trends or more drastically a change of use?

The future for the lucky ones

2012-05-30T08:23:51Z

So the Portas Pilots were announced at the weekend and, despite twitter's best efforts, they were kept pretty secret until Saturday. Given our involvement in this project to date, we were among the lucky recipients of the list under embargo. And as tempting as it is to shout 'I know!' from the rooftops, or more accurately the twittersphere when you're privy to this kind of information, we managed to restrain ourselves - although colleagues did question whether it was really necessary to staple lips together.

So what do we make of it all? Well our President Peter Drummond, CEO of BDP, got the early morning Sky News slot on Saturday to tell viewers that we believe this is an incredibly exciting first step on what can only be a long journey in making our town centres the lively and bustling places they should be. Alongside the enthusiasm and creativity of these 'Town Teams', we need the private and public sectors working hand in glove in order to deliver significant and lasting regeneration. Michael Green, our CEO, dealt with some of the regional broadcasters and the excitement about the prospect of the Portas Circus coming to town with consummate professionalism, despite images of 2 men 1 dog, which can be very off-putting.

We're throwing our muscle behind this initiative as we believe there's a real need to highlight the plight of towns and cities across the country, and critically some of the obvious structural drivers radically changing the retail landscape. We're also working with the BPF on an industry mentoring programme and have made a range of products and services available free of charge to the successful 12 in the first phase and subsequent 15 in the second.

Mary has had a really tangible galvanising effect on this debate, but we all know it's the power of collective action that will uncover solutions, the whole is after all greater than the sum of its parts.

Political value and town centres

2012-05-24T15:18:54Z

It's been a busy few days in Parliament with various goings on under the slogan of 'saving our town centres'. Unlike lobbying for an amendment to a clause in a Bill, or trying to get policy changed by arguing your case with Ministers and their civil servants, it was all about politicians showing leadership (something they are often criticised for being near enough incapable of) by keeping the profile of an issue as far up the political and news agenda as they can. Former Cabinet minister turned back bench agitator Jack Straw MP kicked off proceedings with a lively debate about the use of particular planning technique (namely the use of Lawful Development Certificates (LDCs) to establish whether implementing previously obtained minor permissions would create new planning units, and therefore a new planning chapter in the history of the unit covered... if you were interested) that would ultimately enable the sale of a wider range of goods than was originally proposed. His motive is to do what he can to support a vibrant Blackburn town centre, and raise the profile of an issue that is almost certainly national rather than local to this part of Lancashire.

On to Tuesday night and an event at the House of Commons (Jack in attendance, enthusiastically plotting the next move in his campaign to elevate the profile of the Lancashire Spring) where we were hosted by Marcus Jones MP and Ann Coffey MP in the Members Dining Room. Different parties, same commitment to a cause. Marcus is the extremely amiable and committed Chairman of a recently formed All Party Group of MPs and Peers who support town centres. He's also one of the 6 MPs asked by George Osborne to look at the issue of empty rates and report back, so worth engaging with. The Charter for Town and City Centres, which BCSC supported, was signed by nearly 30 MPs by the time we were evicted in favour of hungry Parliamentarians waiting for their supper. It was also great to see minor celebrity meet politics as one of the Apprentice stars, Adam Corbally, was there to lend his support for the role markets play in creating a positive town centre experience (I understand from my sources that he was also spotted later on in the Strangers Bar enjoying a couple of subsidised pints). With Grant Shapps, Minister for Enthusiasm, there to announce 3 more Portas Pilots will be added to phase 2, and that these will be announced before the summer recess, I'm ending the week believing that the power of political leaders is as much to keep issues at the forefront of individuals' minds as it is making or shaping policy, regulation and legislation.

Experience is the key in battle with online retailing

2012-05-21T08:25:33Z

Alan Thornton, Chairman of the BCSC Retail Marketing Group and Director of MADISONSOHO, discusses the methods retailers can use to offer a shopping experience that online can't

While online sales have yet to inflict a mortal wound on shopping centre sales, many centres risk being "nibbled to death" by a gradual erosion of sales as shoppers favour online convenience over a real-life shopping trip.

For many centres, Customer Experience used to be a 'nice-to-do'. Today it's more of a survival strategy. As the High Street experience becomes less palatable to many consumers, bigger shopping destinations are catching on to the benefits of experiential shopping. For smaller centres it's a potential lifeline.

Shopping centres need to ask: 'what can I provide in the way of experience that shoppers can't download'. It could be a major event activity like CentrO Oberhausen's award-winning Rizzi art show, but it could also be as simple as horticultural demos being run from a flower kiosk or yoga classes in an empty unit. Westfield Stratford includes a built-in kitchen demonstration area within the mall. Retailers are similarly cottoning-on to the benefits of brand differentiation though the experience of the stores. A glass of champagne and a grand piano in fashion store Sacoor Brothers or the construction of the fictionalised thematic High Street to Tedbury in a new Ted Baker concept store.

Despite the challenges posed to retail by the digital economy, it's important to turn the threat into an opportunity. Innovations like Flashmobbing bring a sudden explosion of activity to the mall, but importantly it works in conjunction with the digital audience not against it.

Historic venues such as Covent Garden built their retail appeal on the inherent theatricality of their space. Street performance is one of their strongest USP's so it's hardly a new idea.

Some centres literally incorporate a theatrical experience - Kozzi in Istanbul won international awards for its local integration of a theatre within the Mall. In Dubai, Mall of the Emirates does the same while in the UK theatres form an integral part of the space in local schemes in St Albans and Hounslow.

Worth considering how many retailers successfully use shopper experience to bolster their customer service. Anyone who has seen the Apple staff lining up to applaud shoppers on launch day will know that Apple staff are trained to perform but in this case it's the shopper that's made the star of the show.

More Retail Please!

2012-05-17T15:13:03Z

Davinder Jhamat, Head of Research and Education at BCSC, vents her frustration at Birmingham International station's wasted potential for retail gain.

Now, I very rarely moan but on this occasion I do have a serious beef which needs to be aired.

I'm a daily rail commuter where my hub is Birmingham International station. The serious commuters amongst us can appreciate that when you disembark after a long day at the office a retail offer can only be a good thing for those bare essentials. Don't you think?

I'm not talking about high end fashion brands or anything too bling bling but just the simple things as an express supermarket, a chemist, maybe a dry cleaner / shoe repairer or even a good takeaway. So can someone explain to me why Birmingham International station has none of the above? For it surely has the space for it.

Although I appreciate it is not a regional hub, has no one cottoned onto the fact that with thousands of commuters passing through this station - whether they are journeying to work or using it as a connection to the airport - the potential and value for retail could be immense? Personally, I think the station can do better and benefit more than just a simple WH Smith and Subway offer. So more retail please - the station needs it! We the commuters need it.

It's off my chest now. I just wanted to share the pain with you.

3D Printing - What Does This Mean For Retail?

2012-05-14T08:33:38Z

Davinder Jhamat, Head of Research and Education at BCSC discusses the forthcoming "third industrial revolution":

A few weeks ago I stumbled across an article in The Economist which was discussing the next industrial revolution - 3D printing. With the first industrial revolution of the textile industry in the 18th century, followed by Henry Ford's mass assembly line production of the 20th century, people are now talking about 3D printing as the third industrial revolution which allows for digital manufacturing with a personal twist.

I initially struggled in understanding the concept and visualizing the technology but digressed to YouTube to find out more. I came across the following video which made everything crystal clear: 3D Printing a Bicycle

Watch at your own leisure.

The merits of the technology are as follows. As consumers become more sophisticated in what they purchase in terms of goods, colour, feel, etc., manufacturers are becoming increasingly aware that producing such bespoke goods for niche markets is cost ineffective, particularly in reference to accessing raw materials and subsequent production costs. The waste issue is a separate matter. With 3D printing you have the ability to digitally print products in smaller batches, allowing for more effective production and marketing.

Perhaps one day we could even end up producing goods within our homes! You may laugh as it seems a little out there but two decades ago, laser printers in the home were almost unheard of and partly construed as a luxury commodity. Fast forward to today and now the majority of us have personal printers. Keep that finger on that forward button and imagine the repercussions 3D printing would have on the retail and shopping centres if this technology became readily available to the average household? We may not necessarily need a shop or online retailing to purchase goods. What the consumer would require would be access to raw materials allowing him to produce / print goods in the comfort of the home.

It's not an imminent picture, but imagine 50 years from now how and what will we be shopping for? Would retailers have to adjust their lines so that they just sold raw materials and in effect become wholesalers? What would be the purpose of shopping centres and what would we use them for?

The 3D printing technology already allows for the production of chocolate. 3D Printing a Chocolate - Tis quite amazing.

All this future gazing stuff seems a bit wild and far fetched, but look what Apple has achieved and where it is heading. Not so funny now, is it?

Double dip, double trouble

2012-05-04T08:01:00Z

Guest blogger, Philippa Latimer - Public Affairs Manager at BCSC - reports her thoughts on today's IPD figures and our economic woes.

The Prime Minister must now look back on the days of late 2011, with its associated pesky NPPF wrangling, and general Big Society malaise with misty eyes. Those were the days. The easy days when the Rt Hon Member for Tunbridge Wells could be dispatched with his affable charm and the frustrations of the electorate would fall away.

If only the political chaos of these torrentially rainy days of "spring" 2012 could be quite so simply mitigated. Now we don't just face the real risk of flooding, but we're reluctantly dipping ourselves back into the recessionary bath. It is cold and it makes us all rather grumpy. We're bored and tired of this "great recession." It seems to have lasted forever and we all long for the days when we can once again splash out on a treat and not feel consumer guilt.

News today from IPD that property values remain 35 per cent below 2007 levels add some empirical clout to the anecdotal sense that all is not well in our economy. The announcement late last month of the double dip came as a disappointment. Today's IPD report further compounds this.

Today's report shows that outside of central London, the property situation remains bleak. Property values continue to decline. When London is taken out of the dataset, values have now been declining for three consecutive quarters.

This news will add to the reluctance of investors to back new developments which, in turn, reduces demand for construction. The cranes stay on the ground, and we look set to remain in our economic slump. We are all in serious trouble.

The IPD's role is to release the data and hope that the decision makers respond to it by pulling the appropriate policy levers.

David Cameron and his team have already pulled the lever marked "planning reform". Unfortunately, it will be months (if not years) before we are able to know if this has made any difference.

We need more immediate measures. BCSC has long advocated the rapid introduction of TIF, first promised by the DPM is September 2010 yet still to materialise. We have championed a more pragmatic approach to business rate setting. This year's 5.6% increase demonstrating the true absurdity of basing the rate on only one month's figures. Going forward, we'll continue to call for these measures to be addressed with a greater sense of urgency than the Government has previously been willing to provide.

Now is the time for urgent action - the waters are rising, and the voters are rebelling.