May 2009 Archives

At first glance, burying your office in an unpopulated wilderness could be deemed as commercial suicide, but Spanish architecture practise SelgasCano is obviously very comfortable with its position in the market, as it's done precisely that.

The lack of any other construction certainly helps this inspiring structure stand out.

It is accessed via a hidden stairwell, which winds into the forest floor.

Workers find themselves at chest level with the ground (an eco-conscious bid to conserve energy via natural insulation) and sit beneath a glass roof that provides natural light and a leafy prospect into the trees' canopy.

Yet there is more to this building's design than first meets the eye. Neuroscientists studying how rooms affect your mood believe that low ceilings encourage detailed work, while views of nature help employees' creativity.

Two important factors the workers should bear in mind when they realise they are spending their days in a sunken glass tube.

Former Economist editor Helen Alexander has told firms to hire more women for boardroom roles, just hours after being nominated as the next president of industry union the CBI.

Alexander warned there is a risk of "group think" at firms which only put white men in senior roles, arguing the benefits of diversity justify focusing on female appointments. She added that given the uncertain economic times, constructive dialogue is critical.

Alexander will become the first ever female president of CBI if she gets approval in June. The CBI, considered the most important trade association, represents 80 of the FTSE 100 firms.

The absence of the trademark Knight Frank sausage at its central London breakfast back in February certainly did not go unnoticed and clearly showed the tough times we are all in. But thankfully it has now made its return and with it comes the hope of recovery.

The meaty snack was resplendent in all its glory at the agent's M25 Breakfast in London's Dorchester hotel on Tuesday, and one property figure remarked: "The Knight Frank banger has become a bellwether for our times. The larger it gets, the happier we can feel."

Following the disappointments of the highly controversial Champions league game this week which would have left many City workers long in the face, there is at least one opportunity for Chelsea fans to possibly raise a smile.

Chelsea FC is staging a special tournament on Thursday 4th June, where 24 teams will compete for the Stamford Cup and the chance to win an executive box for one of next seasons home matches.

But don't get too carried away. It costs a hefty £1,980 (plus VAT) to enter a squad of nine players, something I'm sure would not be covered on the company expenses.

Although for the lucky few, City A.M. is offering one team of City-based workers a place for free.

Land Securities chief executive, Francis Salway has warned that the construction industry should not expect to see any major commercial development until 2013.

The boss of the major developer addressed delegates at a monthly meeting today about the current state of the property and construction market.

He said: "The simple issue is that there is no point developing buildings if occupiers won't commit to buying space."

He added that he couldn't see the market picking up until 2012 or, more likely, 2013 which is when he thinks people will "begin to dust off plans and thinking about development."

Other speakers at the breakfast at the Dorchester Hotel included Nick Ritblat, Martin Moore, managing director of PRUPIM and Ian Marcus Chairman of European Real Estate Investment at Credit Suisse. He predicted there was unlikely to be a bounce back in the office market when the economy picks up as redundancies have left a swath of grey office space that will need filling first.

The general outlook was that the next two to three years will continue to be tough, especially for those working in the construction and property industries.

It is not just huge increases in rateable value that occupiers in London need to be worried about. From next year, a 2p levy will be added to the uniform business rate (UBR) - the multiplier set by the government and applied to the rateable value of each building to determine its final business rate liability.

The levy has been applied under the business rate supplement, which has been introduced nationally to give local authorities the power to raise cash for economic development. What this means for London is that, from 2010, occupiers will pay an extra 2p on the UBR of 48.1p to help Crossrail fund £3.5 billion in borrowing. It will be applied to occupiers of properties with a rateable value of more than £50,000.

There is the argument that the government does not need to charge the full 2p supplement rate for Crossrail because its calculations are several years old and as a result we are going to see these huge increases in rateable value. Because you would have more occupiers above the £50,000 threshold, the government could probably afford to decrease the levy to 1.5p.

For occupiers in the City, there is more bad news in the form of a surcharge of 0.4p on the UBR, introduced in 2004 by the City of London Corporation. In addition occupiers which do not qualify for small business rate relief - pay another 0.4p.

In total, that means an additional 2.8p on the UBR for City occupiers and, if the building is vacant, landlords. The UBR will be announced alongside the valuation list in the autumn.

A recent set of results, released by PricewaterhouseCoopers, is enough to make hearts sink. It reveals that top earners in Britain will soon pay more tax than their counterparts in France and Germany, making the City less attractive to multinational institutions. Those earning over £150,000 are already being hit by the rise in top rate tax from 40 - 50%, the 0.5% increase in national insurance contributions, the cut in tax relief on pension contributions from 40 - 20%, and the abolition (which tapers in between £100,000 and £107,000 per year) of the tax allowance.

These increased tax rates erode incentives and can even lead to a reduction in tax revenues as those targeted quit the country, work less, or find ways of avoiding the tax.

The new tax rate now means Britain taxes top earners more heavily than Germany, France and America. In Germany, top earners keep 60.5% of earnings, in America 59.8% and France 58.4%. An executive on the same salary in Japan would keep 62.6%, Switzerland 67.5%, Guernsey 80%, Singapore 82.6%, Hong Kong 85%, and the United Arab Emirates an incredible 95%.

These increases could turn a trickle of firms leaving Britain into a flood, and in the current climate this will be increasingly concerning for landlords.

American International Group, the stricken US insurer, is to suffer the embarrassment of having its name stripped from the landmark AIG Tower in Hong Kong. The 185 - metre tall structure is to be renamed according to the wishes of American International Assurance.

The 40 storey skyscraper comprises around 450,000 sq ft of office accommodation and AIG is one of the key tenants for the property. Construction was completed in 2005 and the building is famous for its revolving restaurant.