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Is time running out for the global pharmaceutical industry? 

Patents for some of the biggest drugs in the world are about to expire. The revenues generated by these products are in the billions and these income streams are about to collapse. A string of bad results from those companies has not helped matters.

Cambridge with its heavy reliance on the R&D sector could be in the firing line. Will Mooney at Carter Jonas spoke to EG at our annual Cambridge reception last month and explained that without these some of the world's biggest drug companies can't afford to fund the next round of research. We're talking big names here: GlaxoSmithKline, Eli Lilly, Novartis and Pfizer all of whom are practically pharmaceutical industry royalty.

They'll be getting down to a lean, mean size but could this be a good thing for Cambridge?

Will Siliconfen be hit as firms make redundancies, or could an necessity to foster associations with smaller firms and academic centres boost Cambridge? Pfizer's own crisis certainly helped the market. The pharma giant might have shut down its Sandwich, Kent facility but promptly went and set up in Cambridge. 

Listen to Will Mooney by clicking below to hear what he thinks the outlook for Cambridge's property market is.

You can read an in-depth analysis looking at the outlook for Cambridge's science parks in this Saturday's EG magazine.



Drug money by images of money on Flickr. 

Earlier this week we got the first glimpse inside Botanic House, Cambridge's tallest building. 

Mills and Reeve signed one of the largest prelets in Cambridge last year when it took all 52,000 sq ft of Pace Investments development, the first phase on the Hills Road site.

Here Mills and Reeve partner Jamie Wheatley, talks about why they chose the building, what it's like negotiating a deal in Cambridge at the moment and why they didn't go to Brookgate's CB1.

Below you can listen to Bidwell's head of business space Dick Wise, who acted for Pace on the deal. He'll be talking about negotiations from his side of the table and what occupiers with lease events should now do faced with Cambridge's dwindling stock. 

Just yesterday Bidwells announced unprecedented figures for the city's office market, here Dick looks ahead to the end of this year and explains how the competition for space might  end up being bad for take-up figures in 2012. 

First glimpse inside Botanic House, Cambridge

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There were big sighs of relief last year when law firm Mills and Reeve finally announced it was relocating to Botanic House in Cambridge. 

Since then most agents have been quietly chuffed that a building as big and as nice as Botanic House was going up on the Cambridge skyline and that phase one on the landmark site was underway. 

But, until now, nobody has set foot inside it. Today EG got the first glimpse of what Mills and Reeve's new home will look like when it moves in late this year. Sadly there will be no roof terrace -shame as the view from the top , over the colleges tops, even on a misty day like today were spectacular. Cambridge, being Cambridge, means that Botanic House is the tallest building around.  

The fourth floor - with its treetop view out over the botanic gardens - will probably go to KPMG (that's widely talked about in the market but everyone today was still being very careful about confirming this) and half of the ground floor will be sublet - with heavy hints that an estate agent may be interested. 

Pace investments are probably sighing the biggest sigh of relief. It's seen off competition from CB1 and took a considerable risk. Pace is also owners of Mills and Reeve's existing building which is virtually next door. It took a punt and started speculatively building Botanic House in the hope that the law firm would move. 

What Pace's chief exec Johnny Vincent now does with the rest of the site is anyone's guess.

Croydon's conundrum after Nestle takes a break

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Thumbnail image for kit kat.jpgSo it's official. Nestle will leave Croydon. The town's biggest and highest profile employer is heading to Crawley. 

The Kit Kat manufacturer leaves in its wake 120,000 sq ft of secondary office space and a massive dent in the Surrey town's confidence. 

Croydon council knew that the town's office stock was ageing and old and offered few options for the conglomerate.  In fact the council says around a third of the town's stock needs razing. It has been keen to get this outdated stock back into its own hands. Nestle leaving probably wasn't quite what it had in mind. 

It has long since feared Nestle would up sticks and go and it's something we have written about extensively in the past. Jon Rouse, the incredibly well respected chief executive at Croydon council, was measured when asked about Nestle's possible departure back in September last year. He said: "Nestlé is important for the borough and we want them to stay. But all global businesses are footloose and you cannot tie your economic policy to one company."

The council can't be accused of thinking small. It even mulled a land acquisition fund in a slash and burn move to stimulate regeneration and rents by removing the drag of the outdated stock. That would be quite ballsy but may be exactly the sort of move the town now needs. 
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Peter Muir, is director and head of Scottish rating with property consultants at Colliers International.

The landmark decision announced yesterday by the Fife Valuation Appeal Committee on non-domestic rates in Scotland could provide a much-needed boost to the Scottish commercial property market and could help improve cash-flow for both occupiers and landlords. 

A consortium of rating advisers, which included Colliers International, GL Hearn and BNP Paribas, successfully led evidence before the Fife Valuation Appeal Committee, on behalf of a number of landlords and occupiers at The Mercat Shopping Centre, Kirkcaldy

This is a milestone, in a process that may see the Committee's decision appealed by the Fife Assessor to the Lands Valuation Appeal Court in Edinburgh. 

However, if accepted or confirmed by the Court, it would in effect mean a reduction of up to 50 per cent on the values set across Scotland in 2009/10 and introduced with effect from 1 April 2010.

The implications for landlords and tenants are significant, especially from a cash-flow perspective. Occupiers will benefit from a substantially reduced rates liability, which would clearly be welcomed. A reduced rateable value will also benefit landlords while marketing vacant units, with the lower value being attractive to any interested tenants.

In the medium term, this case could see a significant increase in appeals across Scotland. Assuming any appeal is dismissed or not lodged, the decision has opened the doors to reductions, where a drop in rental value can be shown to have occurred between the revaluation date and the statutory date of 1 April 2008. Most areas granted a reduction in 2009/10 have already been appealed by agents acting for interested parties but it is unlikely these will be resolved until after the conclusion of this particular case. 

snow shopping

The Christmas shopping sales figures released today by the British Retail Consortium pretty much confirm what most involved in the sector know already; low consumer confidence as a result of economic conditions, compounded by the chaos caused by the snow, has sorely tested the UK's shopping locations.

As reported on EGi this morning, the BRC's figures show that like-for-like sales dropped by 0.3% in December 2010, compared with December 2009, with large, non-food items being hit the hardest.

But despite the backdrop, a trawl of the web reveals that plenty of occupiers and landlords across the UK have managed to buck the trend. Here's a round-up:

  • Retail Week reports that Sainsbury's emerged from the festive period as the winner among the 'big four' grocers, with the grocery sector clocking in with growth of 5.1% in the six weeks to December 26.
  • The BBC, meanwhile, reports that high street favourite Marks & Spencer's Christmas sales were up 2.8% year-on-year in the last three months of 2010, showing that it is not all doom-and-gloom for the UK's major retail occupiers. That said, The Guardian reports that Debenham's lost £30m in sales as a result of the snow chaos. 

 

London, City & Docklands synopsis

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Estates Gazette London, City & Docklands Focus synopsis
Published October 16, 2010


Retail
Analysis of market conditions and future trends
Contact: Liz Morrell, freelance writer, 01454 415 509, lizmorrell@drdatamail.co.uk

Occupiers
Analysis of occupier trends
Contact: David Thame, freelance writer, 01544 262 896, dthame@clara.co.uk

Development
Analysis of market conditions and future trends
Contact: James Buckley, senior reporter, 020 7911 1810, james.buckley@estatesgazette.com

Investment
Analysis of market conditions and future trends
Contact: David Thame, freelance writer, 01544 262 896, dthame@clara.co.uk

Market in numbers
Please contact regional editor stacey.meadwell@estatesgazette.com if you think you can supply up to date City and Docklands market stats and predictions.

 Please contact writers by Monday 20 September 2010

 EG's regional Focuses are now available in a digital version. To see the first edition, our Scotland Focus, please go to www.estatesgazette.com/focus

 

 

Thumbnail image for Thumbnail image for Thumbnail image for icecream.jpgRain is drizzling down the windows of EG Towers and the skies above are a distinct hue of grey. Summer, it seems, is over.

But try telling that to Neptune Developments, which has today issued an ice-cream-based press release, which, bizarrely, includes mention of the bodily functions of an Asian mammal.

The firm has announced that "the world's first Mersey Mussel-flavoured ice cream, washed down with a £50-a-cup coffee will be on the menu" at its £60m revival of the Wirral seaside resort of New Brighton.

To explain, Birkenhead-born businessman David Dooley has signed up to open a branch of his coffee and ice cream parlour, Cappuccinos, at the scheme.  

Dooley promises that the outlet will sell some frankly outlandish-sounding flavours. As well as Mersey Mussel, chilli and bacon-and-eggs flavours will also be on the menu.

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Finally, a bit of good news for High Street UK.

Cushman & Wakefield's latest findings show that the number of empty shops blighting Britain's major shopping drags has fallen below 10% for the first time in 18 months.

Indeed, average retail availability across Britain's high streets has fallen from 11.1% back in May to 9.8% this month.

C&W puts it down to the increasing lack of retailer administrations (Retail Week recently reported that Q1 2010 saw the lowest number of administrations for four years) coupled with stronger operators expanding their market share. The findings hardly reveal a robust shopping scene, but compared with the retail bloodbath of the last couple of years, agents must be breathing a huge sigh of relief.

Click on the following file to see the figures behind the findings: Retail availability.xls

Metro Bank's opening today on the corner of High Holborn and Southampton Row has created quite a media furore, not least because of its 'dog's welcome' stance. And from EG Tower's HQ in Holborn we've had a prime viewing spot of the opening of the first branch of the UK's first new bank for over a century. 

The old stalwarts of the banking world obviously weren't in the mood to indulge the new kid, and Barclay's Bank had employed its own guerrilla tactics.

Alongside Metro bank's dixie band, the complimentary shoe shine and ladies on stilts were Barclay's horse guards and a town crier handing out their own freebies.

We'll be keeping a beady eye on how things go for Metro bank, not just because it has aggresive expansion plans for 200 stores that might keep a few agents busy for some time. But it will be interesting to see how a bank, who's prime selling point is being open 7 days a week, fares having its first branch on a corner in Holborn which isn't known for its bustling weekend trade.

And if you're in the mood for a bit of Dixieland then there's also a short video from outside the bank on our Flickr page.

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