May 2011 Archives

The deal is confirmed, the £197m transaction is due to close today, and the company formerly known as Jones Lang LaSalle and King Sturge is launched tomorrow. With so much happening in such a short space of time, what does the coming together of these Premier League agencies mean for the Midlands market?

As previously reported on EGi, JLL will gain offices in Nottingham and other places such as Bristol, Liverpool and Newcastle but will suffer duplication in cities including Birmingham, Manchester, Glasgow and Leeds.

I spoke to Ian Cornock, head of King Sturge's offices in Birmingham and Jan Thompson, head of JLL's Brum operation on a conference call today, and the duo were keen to put forward the positives of the deal.

With over 60 staff in each office the teams are of equal size. KS sits in 13,000 sq ft at 45 Church Street, while JLL occupies 8,500 sq ft at 1 Colmore Square. With only two years left on its lease, JLL was already starting to look at its options in terms of space in the city prior to the merger.

Thompson says: "Ian and I have already sat down to look at getting the teams together. It may be that some JLL staff move to Church Street and some KS staff move to Colmore Square, but in the long term we need to be together. However, it's key that we keep an eye on costs."

Although the leadership of the Birmingham operation is yet to be determined, Thompson and Cornock are eager to convey that they have worked together before at Colliers for 11 years and that they get on well.

As for duplication and the possibility of staff losses, Thompson says: "There's not an awful lot of overlap in Birmingham. We have to try and manage things through natural attrition."

However, local agents believe there could be significant job losses. One, who preferred to remain nameless, says: "There is definitely going to be fall out from this. We're sitting back and waiting for it to happen."

As for Nottingham, Thompson says it's a market the JLL Brum team know reasonably well and that JLL will "embrace our King Sturge colleagues in the city." Asked if any of the West Midlands team will move across, Thompson says that this is still up for discussion.

Although the detail is yet to be finalised, King Sturge's Nottingham office must be grateful that there is not the overlap in teams such as its West Midlands counterpart.

With a total staff complement of around 20, KS has a small team in Nottingham but has been punching above its weight in recent times with landmark deals including the 100,000 sq ft prelet to E.ON on the Guildhall site last year.

As for the impact from the merger on the Nottingham market, Tim Garratt, director at niche agency Innes England says he's "not losing any sleep over it." He adds: "I don't think it'll make any difference in Nottingham at all. King Sturge has a talented group of people here and my guess is they'll remain. I don't see the merged firm as any more of a threat than KS is today. I do however think this is shareholder driven."

With a visit from JLL's UK chief executive Andrew Gould and King Sturge senior partner Richard Batten scheduled for 10.30am tomorrow morning, it will be the dawn of a new era not only for the the newly merged Birmingham team but for the whole of JLL and the formerly known King Sturge.

What are your views on the JLL/KS tie-up? Click on the comment button below to share your thoughts...

Image courtesy of Aiden Jones via Flickr.com

The auditions are done, the filming is in the can and the stage is set for this year's ever-popular annual BRENDA (Birmingham Real Estate Novel Development) Awards being held on Friday at Brum's Burlington Hotel.

The judges work is now over and the contestants will battle it out on Friday for the newly introduced Platinum Gnome (that so beats my golden one!) which will no doubt outshine any other object on the winner's mantlepiece.

Chief judge and organiser of the event Jilly Cosgrove tells me that there are a mix of talented lawyers, surveyors, developers, contractors, and project managers all battling it out to perform and win the title of winner of the Birmingham Property's Got Talent event at the tongue in cheek awards. Acts include singers, dancers, stand-up comedians and  jugglers - and an absolute hoot was had by all during the recent three days of filming.

Jilly adds: "If there is one thing that has come out of this change to the normal style of the BRENDAs - is that Birmingham Property has got talent outside property!"

Tune in on Friday for live tweets/blogs and even a picture or two! The EG will also publish the winners details and more pics in the 18th June edition of the magazine.

In the second guest blog post from Alliance Planning director Keith Fenwick this week, Keith shares exclusively with Estates Gazette much needed detail and expertise on dealing with Community Infrastructure Levy (CIL) Relief and warns to watch out for the small print!

One document which does now start to provide additional detail on CIL is the Community Infrastructure Levy Relief: Information Document (DCLG May 2011 click here)   - this is a MUST READ for every developer, although be warned, you will need your lawyer, accountant and tax advisor to guide you through. The document sets out the circumstances by which relief will be granted to CIL.

There are 3 main strands of relief, those for charities, where social housing is provided and exceptional circumstances.

Charitable relief is largely self explanatory (even if the process isn't), there are two types of relief, mandatory and discretionary.  The key point here is that authorities will only be able to offer discretionary relief to charities, where they have an adopted policy already in place stating that they may do so, they can't apply a discretionary relief to your charity just because they accept your circumstances when an application is made. The policy must already be there. If you are a charity - start your lobbying now.

Here is the first of two guest blog posts this week from Keith Fenwick, director at Alliance Planning in Birmingham, who gives an overview of the proposed Community Infrastructure Levy (CIL). Watch out later this week for information on CIL relief which will be a must read for every developer.

Some detail (although not as much as one might have wished for) is starting to emerge on how the government intends to operate the Community Infrastructure Levy (CIL) (Community Infrastructure Levy: An overview DCLG May 2011, click here to view document).

Some of the detail we already know (a tariff based system, to be applied across a wider range of proposals to address cumulative impacts), some of it we didn't (local authorities empowered to be able to borrow money against future CIL receipts).

So what do we now know? Well several things really, including that the historic linkage of development mitigating against its own impacts is to be broken - in future development will mitigate to meet the wider infrastructure needs of a community.

Meanwhile, the levy will apply to all new building's over 100 sq m, even if they are consented under permitted development rights, and to any new dwellings.

And the levy will become due upon commencement of development.  Payment may be made in instalments, but only where an authority has a policy to support this.

The guidance is clear that charging regimes should assess the impact CIL will have on the economic viability of development in their area.  Interestingly, the charging schedule must be examined by an 'independent person appointed by the authority' (ie not necessarily an Inspector from the Planning Inspectorate).  The examiner's recommendation will be binding, but limited to a general test of reasonableness. However if the LPA do not like their report they can choose not to adopt the schedule and put revised proposals through the process again.

So what don't we know?
 

• We don't know how the £1bn target is to be raised by 2016 if the economy is depressed?
• There is still no answer to the question - 'how does the developer ensure a needed school is provided in a timely manner, if the delivery is secured through a centrally held tarrif?'
• Who defines what the 'meaningful proportion' of CIL for the local community should be, and how is that decided?
• How do tariff regimes respond to rapidly changing economic contexts?
• How does the 'backfilling of early funding work' in practice?
• How has the government assessed the cost of funding CIL at commencement of development, rather than at occupation?  Do they understand the potentially huge implications of this burden on development viability?

What are your thoughts on CIL? Feel free to have your say via the 'comment' button below.

ESTATES GAZETTE BIRMINGHAM FOCUS
Published June 25, 2011

Retail
An overview of the city's retail landscape
Contact: Lisa Pilkington, Midlands editor, 07771 673 458
Email: lisa.pilkington@estategazette.com

Offices
A look at future development.
Contact: David Quinn, freelance writer, 07841 115601
Email: david@wordsdept.co.uk 

Industrial and distribution
An in depth analysis of the sector
Contact: David Quinn, freelance writer, 07841 115601
Email: david@wordsdept.co.uk
 

Public sector
Analysis of future issues
Contact: David Thame, freelance writer, 01544 262 896
Email: dthame@clara.co.uk

Market in numbers - statistical overview (includes offices, retail & industrial)
Please send up to date stats (Q1 2010) to Stacey Meadwell, regional editor, 0207 911 1819
Email: stacey.meadwell@estategazette.com

Deadline for receipt of editorial information is 27 May 2011

For general Midlands Focus enquiries please contact Lisa Pilkington
Midlands editor - 07771 673458

Budget hotels in the Midlands is a sector to watch according to Tony O'Brien, UK development director at Travelodge, who spoke yesterday at the West Midlands Hotel Investment Briefing in Birmingham - see my live blog posts for more information.

In today's guest blog Tony gives us an insight into the sector.

We organized the West Midlands Hotel Investment Briefing yesterday in response to the strong interest shown by developers and financiers within the region for our product. Virtually no other companies are offering 25-year, unbroken, institutional leases with 5-yearly rent reviews, allied to a strong covenant and significant expansion.

To go along with that interest however, there is also a lot of confusion surrounding the hotel market and the opportunities within it.

My message to the 120 in attendance was clear: the budget hotel market's UK growth is set to continue rapidly for the next two decades at least.

Ian Taylor of Marketing Birmingham instead discussed the scale of tourism and visitors within the UK's second city.

Have you seen Whitby lately? Reply here with evidence...

Last night may not have been so great for some political parties (ahem...no names mentioned) but it was a much happier affair for the winners of Estates Gazette's Regional Awards in the East Midlands. Not least because they got to pick up their gongs from yours truly and have a celebratory glass of bubbly or two in the process.

Over 200 guests turned out, seeking a welcome refuge from the polling booths, at a gala dinner and awards ceremony at Nottingham's Belfry Hotel. ITV weather presenter Lucy Kite presented the RICS East Midlands Awards 2011, while I handed out the glassware to the winners of the Estates Gazette's Regional Awards for the East Midlands.

Miller Birch's Peter Gadsby and Mark Bielby picked up the trophy for East Midlands Property Company of the Year. A well deserved accolade following its enviable prelet to E.ON last year at Nottingham's Guildhall site and the subsequent investment sale of the scheme for £30m in February.

Equally worthy of an award, was fellow winner Fisher Hargreaves Proctor (FHP) which scooped the accolade of East Midlands Property Advisor of the Year 2011. John Proctor, Andrew Chapman and Steve Gillott were there to receive the award on behalf of the team.

Meanwhile, votes flooded in for Corby which picked up the RICS's top gong for overall East Mids winner as well as the regeneration award for its Parkland Gateway development.

The development includes Corby's Civic Hub, its International Pool & the Corby Interchange. I was in Corby just a few weeks ago and had a look around The Hub building and it truly is impressive. Definitely worth a visit if you're in the area...

So congratulations to all. Here are some pictures from the evening just click on the link below.