January 2010 Archives

So, CB Richard Ellis has landed the job of advising administrator Grant Thornton on the sale of the former Kenmore site at No 1 Snow Hill Plaza in Birmingham.

Grant Thornton approached agents including Colliers, GBR Property and Doherty Baines, but it seems that CBRE's history with the site stood it in good stead for the instruction (CBRE acquired Grenville Smith & Duncan in January 2008. GSD has previously advised Kenmore on the Snow Hill Plaza site for a number of years - before Kenmore fell into administration last November).

Back in the halcyon, pre-recession days of 2006, Kenmore paid Mark Glatman & James Howarth's Abstract Land around £21m for the site which includes the Thistle Hotel, the outdated and largely empty 1960s-built Kennedy Tower and a small development site known locally as 'the strip' which has consent for 180,000 sq ft office block.

One market observer who prefers to remain anonymous says: "Kenmore spent a lot of money on the tower and the strip - it then brought in the hotel. It's an interesting proposition but it has its complexities."

The market is still reverberating from Friday's shock news that 285-year old property firm Drivers Jonas is to merge with accountancy giant Deloitte (click here for more info). Here in Birmingham it has also been the number one hot topic of conversation...

With both firms having offices in the city - DJ on Cornwall Street and Deloitte in Brindleyplace - it is still unclear as to what will happen with each firm's respective office space.

As soon as I heard the news last week I called DJ's Birmingham head Gary Cardin. He said: "It is very rare to be part of a business which challenges itself and drives its agenda forward with vision and purpose. This merger is an exciting opportunity for both Deloitte and Drivers Jonas and provides the best platform to develop our businesses.

He added: "I'm equally sure that our clients will recognise our forward thinking and the benefits that will accrue. I look forward to forging our business through Drivers Jonas Deloitte where both firms have a long standing mutual respect. I am hugely excited by the proposition and look forward to working with Richard Edwards and the real estate team at Deloitte to maximise a wide range of existing and new business opportunities."

In what is being touted as the most significant merger in over a decade, the move is generally being seen by the market as a smart one between two companies that have obvious synergies.

Deloitte will expand immediately and Drivers Jonas will naturally want to take advantage of Deloitte's global brand.The merger will give the firm instant global reach and with Deloitte advising 99 firms out of the FTSE 100 it also gives DJ access to a potentially huge client base in its existing markets.

GVA Grimley's Charlie Toogood believes the merger is making the industry "sit up and think" and says that "it could be the start of a new era for surveying practises."

However, he admits that people are struggling to understand the fact that no money has been involved in the deal. "The bit that people can't seem to get their heads around is that no money has changed hands. Is the partnership then based upon enhanced returns going forward?  

Toogood also points out that he believes the deal could potentially mark the beginning of the end of agency work at DJ. He says: "The press release stated that the new company will be a consultancy business which makes me question - is the writing on the wall for DJ's agency team?"

If this were to be true it would no doubt be a blow for the agency teams across the country not least in Birmingham. With the deal due to conclude in March let's hope the situation becomes clearer by then...

What are your views on the merger? Do you think this could be the end of agency work at Drivers Jonas? Is the merger a good thing for the companies clients? What impact will it have on the property industry? Reply here with your views...

This week's East Midlands Focus is bursting at the seams with the latest news and views from the region. Here's a quick snapshot of what's inside tomorrow's magazine... 

Profile:  I talk to Derby City Council's new chief executive Adam Wilkinson to find out more about his plans to review urban regeneration in the city and the council's rationalisation proposals. Wilkinson has already started to shake things up in Derby and is also reviewing the council's partnerships with organisations such as Derby Cityscape and Marketing Derby. He excusively reveals his hopes for the city... 

 

Nottingham Offices & Retail: Kurt Jacobs takes a look at the city's office market including the slow pace of development there. Which some say is surprising considering the pent up demand among professionals in ageing properties - many of whom would gladly move to to new premises.However, the log jam in office development may soon unblock. While, South Reef continues to be the only new grade A space to complete this year. Meanwhile, the city's retail market is also suffering from a lack of development...

Leicester and Derby Offices and Retail:  I examine both markets where prelets will be key to unlocking new development. This year is likely to see the completion of Derby's highly successsful Pride Park business park as development space there dries up. A change in focus back to the city centre for the office market is on the cards. Meanwhile, a funding announcement on Leicester's 300,000 sq ft proposed business quarter around the station is due imminently. And both cities prime retail pitches are fighting back against new major developments opening their doors.

 

Northamptonshire: EG's Daniel Cunningham examines Northampton's ambitious proposals to transform the market town into a market city the size of nearby Leicester. Will this vision encourage long awaited regeneration?

 

Lincolnshire: Uncertainty hangs over two schemes in Lincoln. Daniel Cunningham considers both schemes and their futures...

 

Case study - Chesterfield Waterside: Melanie Smith visits the 40 acre Derbyshire site on which ambitious £300m regeneration plans are proposed. But with land values low, is now the best time to go ahead?

 

And if that's not enough for you, this week's Focus also goes to the Home Counties and takes a look at Hertforshire.

Around 60 people braved the dark and cold early this morning for Bruntwood's first ever Business Breakfast in Birmingham.
 
The 19th floor of the newly refurbished McLaren Building on Priory Queensway was the setting for event where Chris Oglesby, Bruntwood's chief executive was due to talk about the company's plans for the Midlands. Oglesby spoke about two purchases to date the McLaren building and the purchase of Cornwall Buildings on Cornwall Street 12 years ago but admitted the firm "struggled to find value in the market then."
 
Future strategy was a little 'content lite' so I managed to nab Oglesby after the event for a quick update. He confirmed that Bruntwood is back on the acquisition trail in Brum and is looking to acquire unloved buildings ripe for refurbishment which it can pick up for a snip and add to its Birmingham portfolio.

Colin Sinclair today quit as chief executive of Manchester inward investment agency Midas to join Bruntwood. In the wake of the announcement Dan Cunningham spoke to Manchester agents, click here to read their reaction.
 

Governments by nature appear to be unable to tell it how it really is. Yesterday's announcement by the Department for Communities and Local Government (DCLG) on the future of the West Northamptonshire Development Corporation (WNDC) is a classic example.

The news that WNDC will, from April 2011, lose the wide-ranging planning powers it was granted as recently as 2006, and be required to work more closely with with development partners was headlined by DCLG as "Strengthened delivery arrangements will drive regeneration in ... West Northamptonshire".

Incredibly DCLG goes on to explain that WNDC: "will now concentrate on strategic delivery of key projects". Hang on a sec, wasn't that the development corporation's remit when it was set up back in those halcyon, pre-recession days of 2004?

And the comment from regeneration minister Ian Austin follows in the same vein; the area, he says, will "benefit from a stronger, more focussed UDC working closely with local authorities and communities". Shouldn't it have been working closely from the start and isn't the whole point of a UDC to be exceptionally focussed from the outset?

Well, yes, but you won't hear the government saying it in public. Still, WNDC got off rather lightly, compared to Thurrock Thames Gateway Development Corporation, which, according to DCLG, will also benefit from "strengthened delivery arrangements". Or, in English, will be subsumed into the Homes & Communities Agency.

Meanwhile, local authorities in Northamptonshire, somewhat miffed at having their planning powers removed, could hardly contain their glee at regaining control of their patches. Within hours of the DCLG announcement, Northampton Borough Council had zapped out a media release asking for planning to be handed back asap please.

Whether any of this will ultimately further regeneration in Northamptonshire is, of course, another matter entirely...

Normally it's agents who are accused of talking up the market. But the state of the economy appears to have driven normally even-handed development partners to push the boundaries. So tut tut Greater Lincoln Partnership (an alliance of public sector bodies) who today excitedly trumpeted plans to the media for a shiny new business park in Lincoln involving joint venture partner local developer Taylor Lindsey.

They even included a pretty picture (above) of how the scheme - Teal Park - will look when finished in 2011. Er, except there's no guarantee that the 80 acres of business and industrial space will be built by then. Or maybe even ever. That's because the development partners don't actually plan to build the units themselves - just carry out the infrastructure work and then sell the 'oven ready' plots on to other developers.

This was the, ahem, minor detail that GLP omitted to share with the media. Fortunately, I quickly uncovered the facts and you've read them here first. But others may have been caught up in what looks like a bit of spin.

GLP - I'll be keeping my eye on you in future! And any other development partners thinking of pulling a similar stunt. You have been warned!

 

At first glance, one could be forgiven for thinking that the economic downturn has wreaked havoc on Birmingham's 2009 office take-up figures. With take-up nearly a third down in 2009 than in the previous year, things on the surface, are looking pretty grim.

But all is not as it appears. Yes, total office take up in the city has (unsurprisingly) dropped considerably in 2009 according to the latest report from the Birmingham Office Market Forum (concensus research from the city's key agents) - to 657,280 sq ft, reflecting a significant drop from 2008's record high of nearly 1m sq ft (959,317 sq ft).

But if we look at 2007's pre-recession total take-up figures for the city they stand at 662,207 sq ft - a mere 4,927 sq ft more than last year's.

The spike in 2008's figures can be attributed to major prelets secured at Ballymore's Snow Hill development to KPMG and Barclays.

However, 2009's figure had a spike of its own - the total was buoyed by the public sector including Birmingham City Council's requirement for its proposed 196,000 sq ft new offices at Birmingham Science Park in Aston. Take this out of the equation and the figure would look quite different at 461,280 sq ft, although not as desperate as many had thought.

So much for the past, what of the future? With some local commentators sitting squarely on the fence, it was refreshing, if not cheering, to see King Sturge's Property Predictions for 2010 which it launched in London this morning, Sadly for the region, KS flagged Birmingham as one of the UK centres most likely to struggle with rents this year due to the oversupply of office space and its reliance on the public sector.

Of course, I'll will be watching to see if this is indeed the case and will keep you posted. Keep checking back to this blog...