The Focus Blog

 Published June 29, 2013 in print, digital & enhanced iPad formats

Economy

An in-depth look at the city's economic drivers

Contact: David Thame, freelance writer, 01544 262896, dthame@clara.co.uk

Agency

Analysis of the agency landscape

Contact: David Thame, freelance writer, 01544 262896, dthame@clara.co.uk,

Retail

Analysis of the sector's strengths, challenges, and future trends

Contact: Mark Faithfull, freelance writer, 07957 174534, Mark.faithfull@btinternet.com

 

Market Health Check

Crunching the numbers, if you think you can supply office, industrial take-up, availability, rents and retail rents for the city - with predictions to the end of Q2 - please contact Stacey.Meadwell@estatesgazette.com

 

Please contact the writers directly for more details about their individual features by Wednesday 5 June

Or to put it another way - development is two-thirds of the way to recovery, or at least to levels seen in the high of 2008. And yes, it's not just those crazy developers getting carried away,  tenants are taking space. A third of total space is now let compared to just 1% in 2011.

Whether that's comfort for regional markets struggling with a supply squeeze but with a belief that if Grade A space was there it would let, or rubbing salt in the wound is another matter.

Check out this very nice infographic put together by Deloitte Real Estate for the full picture. The time period for all 2013 figures is Q1. Click on the picture to seem a larger version.

There is a full analysis in this week's magazine or for EGi subscribers here.

IPD's April figures released this week (£) showed the regions are beginning to recover. Or, to put it slightly more accurately, the decline is slowing.

Now that's not quite the same as doing well but their figures showed that nearly a third of regional assets delivered either flat or positive capital growth, AND (and this is crucial) a higher income return than London. Many of the big agents have been pointing to the yield gap between north and south of the country in their glossy reports. Most regional agents have been saying the opportunity is clear, for example, where else can you get an initial yield of over 9% (as you can for an East Midlands office*)?

Now we have the benchmark figures to prove it.


The breakdown is below, click on the buttons to switch between sectors:

The inner London boroughs have experienced the greatest surge in planning permissions for at least the last two decades. The rate of consents in the inner boroughs have tripled to around 30, 000 in 2012 says EG's London Residential Market Analysis published this morning. Construction starts are the highest since 2007.

It looks as if the boom times are back, says Nigel Evans, the report's author. And, he warns, 'we all know what comes after a boom'.

Click on the image below to see a full size version:

Knight Frank's M25 breakfast this morning showed the market is heading for a major supply squeeze. Active occupier demand outnumbers schemes under construction by 6: 1 and as Emma Goodford, partner and head of National Offices, warned, those occupiers are footloose. 'If ever there was a call to action this is it,' she said.  Of course all this means rental growth, up to £30 per sq ft in some areas it reckons.

All that means development opportunity - the best is in Staines, the worst - when looked at as number of years supply  - is in Bracknell. Hover over the bars in the graph below to see the exact numbers.  But don't let that fool you. Goodford said, as there's a Waitrose about to open in Bracknell, the office market might be about to turnaround. Make of that what you will.

Currently around 15 buildings are in the pipeline and that totals around 1m sq ft.

But of course, nobody is interested in the numbers really. What you really what to know about is the true test of the market: the breakfast and the theme tune. I'm pleased to report it was full English, with croissant And danish And fruit kebabs And endless coffee. Theme tune was Bowie's Changes.

Offices
East vs West
Analysis of the Thames Valley versus the Thames Estuary. Thames Valley has classically performed better as an office market helped by infrastructure improvements. What affect will Crossrail and Boris Island have on the areas, why does the West grab all the headlines and what's the outlook?
Mark Simmons, freelance writer, 07787 561032, msimmons@sourceform.co.uk

Market health check
All the numbers for each sector crunched. Please email Stacey.meadwell@estatesgazette.com in the first instance.
 

In the first of a series of podcasts analysing the residential market Annabel Dixon, EG's residential correspondent, talked to report author Nigel Evans to find out what's behind those numbers and if we really are heading for a prime central London crash.

 


Distribution
Analysis of the future supply and demand trends.
Contact: David Thame, regional features writer, 01544 262 896, dthame@clara.co.uk
 
HS2
How good will high-speed rail be for the North West?
Contact: David Thame, regional features writer, 01544 262 896, dthame@clara.co.uk
 
Economy
Analysis of the economic drivers in the region, the impact it is having on property and future growth areas.
Contact: Mark Simmons, freelance writer, 07787 561032, msimmons@sourceform.co.uk
 
Chester
Analysis of development proposals.
Contact: David Quinn, freelance writer, 07841 115601, davidquinnmail@yahoo.com
 
Investment
Is the North West on investors shopping lists?
Contact: Helen Hamilton, freelance writer, 01568 709155, hamiltonhelen7@gmail.com
 
Market health check
All the numbers for each sector crunched. Please email Stacey.meadwell@estatesgazette.com in the first instance. Please note Stacey is on holiday from Tuesday 14 May returning on Weds 22 May and will respond to emails outside this time.
 

Cardiff office take-up has steadily declined over the last three years and the Q1 2013 figures don't seem to signal any change in the trend, writes EGi Research's Arif Sayeed. 

Second-hand space is dwindling, indicating tenants are opting for lower spec space but what remains to be seen is if they're just settling because there's little else to go for, or if they're  actually more comfortable paying that lower price.

With construction on the speculative 78,000 sq ft Number 1 Capital Quarter progressing well, Cardiff's fortunes may well turnaround in the coming months. Either way the market will have an answer.

Click on the graph below to see where Cardiff could end up if the much hoped for prelets fail to materialise.

The first tranche of 12 Portas Pilot towns were criticised for being wasteful and slow to spend the cash allocated to them and the second wave of 15 towns haven't improved either. There is a heavy dose of irony in the fact that money handed out to revive High Streets and encourage shoppers to spend hasn't worried a cash register or an accounts ledger. Indeed half of the towns haven't spent a penny.

Retail commentator Paul Turner Mitchell used freedom of information requests and discovered that only 13% of the money awarded in July last year has been spent (see map). And of those who have spent some cash there are some curious choices. For example, in Loughborough £13,000 has been spent on surveys, £150 on a photographer to take pictures of Mary Portas and £350 for posting on Facebook. Confess that here on the Focus desk we are scratching our heads about the last one, nice 'work' if you can get it.

While positive benefits seem to be thin on the ground there are some examples of good practice. Lewisham has spent all of its Portas money and has seen pop up shops, a retro market and community hub spring up.

With vacancy rates on the high street increasing, lets hope that other pilot towns follow Lewisham's lead and start spending and on the right things.

On map below, size of bubble indicates how much money each Portas town has spent. Click on the map below to zoom in or click on each bubble to see how much each town has received and has spent. Source: Paul Turner-Mitchell 25Ten