October 2009 Archives

Weekly reports from agents suggesting there is a looming space shortage in the City are failing to encourage British Land to get on and build their 600 000 sq ft skyscraper at 122 Leadenhall. Today Building Design reveals that the developer is asking young architects to come up with plans for a temporary use for the site on which the basement works only have been completed.

That can only mean a further postponement for the Lord Rogers-designed "cheese grater". But there is one scheme that BL must be thinking a lot harder about developing, or, more accurately, re-developing: Broadgate, where plans exist to add 1.2m feet of space to the 4.3m ft estate.

The 16 buildings valued at £2.3b were sold into a 50; 50 joint venture Blackstone last month. The last thing the US investment house will want to do is sit on the deteriorating 1980's offices, especially as they are not worth much more than the mortgages. What the JV will want to do is to re-examine the "Broadgate 2020" plans unrolled by former BL chief executive Stephen Hester in October 2006.

Those plans envisaged gutting and doubling the height of at least five of the existing blocks on the 30-acre estate. But that was in 2006. The world has moved on. Even the City Corporation moves on. Next Thursday chief planner Peter Rees will be talking about "the un-square mile" at a conference. In other words the City is no longer just offices, offices, offices.

That view will have already been picked up by BL/Blackstone. So it will be interesting to see a fresh 2020 vision for Broadgate. A few more shops and café's guys? How about a cinema? What about a nice big conference hall for those fed up trekking to the West End?

In the first nine months of this year CBRE made a loss of $31m on revenues of $2.9b - revenues $1b lower than the first nine months of 2008. In other words the 30 000-strong business has almost managed to slash costs in line with a 25% reduction in revenues, according to the Q3 results released today.

As with JLL's results released yesterday, the fresh numbers for June-September 2009 are the more interesting. In the last three months agreement was reached with the banks to restructure and extend $985m of bank loans. That has raised the quarterly interest payment from $43m to $54m.

Global revenues in Q3 2009 against Q3 2008 are down 21% to $1023m, so marginally better than over the nine month period. Costs are down 19% to $969m. That produced a $57m operating profit - boosted by a $3m gain on selling some CBRE-owned property.

EMEA - which is mostly the UK and continental Europe - has seen a steeper than average fall in revenues, which are down 30% from $271m to $193m. But EMEA chairman Mike Strong has cut costs a little bit faster and produced an operating profit of $11m.

A good overall result for CBRE, given the state of the world in early spring, but, in revenue terms, not quite as good as JLL's. As their smaller rival will be keen to point out, global revenues at JLL are down 12%, not 25%, in the nine months to September.

If only Jones Lang LaSalle had not bought Staubach last year and if only the investment management arm had not co-invested with clients the firm would have made a small profit in the first nine months of 2009. 

But the purchase of Staubach in the summer of 2008 has cost $37m this year in restructuring charges. The falling value of property has cost LaSalle Investment Management $48m. So a loss of $56m would have been a profit of $15m on turnover down 12% to $1.7b, according to Q3 accounts released last night. 

Of more interest perhaps are the fresh numbers for June to September. In Q3 revenues were down 12% at $595 over Q3 2008. But JLL actually made $20m profit, despite a one-off hit of $8m. This can be put down to falling costs, which were $546m in Q3 compared to $643m in Q3 2008 - a 14% drop. In the first nine months of 2009 costs at $1.6b are $200m less than in the same period last year.

In the EMEA bit that interests UK readers revenues were down 26% to $154m in Q3. Operating expenses at $158m were down 22%. The result; a $4m loss for the UK and European operations, which is now showing a $26m loss in the first nine months on revenues down from $627m to $444m.

But JLL managed to pay off $100m in debt and the quietly effective CEO Colin Dyer says he sees "initial signs of recovery." Perhaps not a bad set of results given what a bad time was being had by all in the first six months of 2009.

The headline in today's Times suggesting that "Land Securities calls halt to softer retail rent deals as demand rises," is not quite matched by the substance of the story. A more accurate headline might be "Land Securities offers new lease terms to end war with retailers." For the story is about the launch of LandSecs new Clearlet lease, featured in EG last Saturday.

Clearlet offers RPI-indexed rents and an end to the "cost of money" penalty for paying monthly rather than quarterly in advance. In return retailers have to provide turnover evidence, even if the lease is not a turnover basis. These terms are pretty much what Sir Philip Green was after when he opened hostilities with the landlords in the summer of 2008. 

So has the aggressive Arcadia chief won the war? Not really, just a few battles. Salway and his fellow landlords represented by the British Property Federation have conceded the "cost of money" argument. They have also conceded that new leases can (not will) be signed on Clearlet terms. They have also lowered rents to individual retailers in distress. 

But what has not been conceded are changes to existing leases. As Salway gently puts it today: "we do not believe across-the-board changes to agreed contracts are appropriate." Indeed not. That would bring investment values crashing down. But there is a grain of truth in the headline. For the Clearlet initiative signals an armistice. That may give some landlords the opportunity to call a halt to softer deals: especially if they are called Land Securities.

You can only admire the cheek and chutzpah of Nick and Christian Candy: the brothers have the cheek to sue the Qatari's for unpaid fees on Chelsea Barracks, reports the Sunday Times; and the chutzpah to set up a London residential property fund, reports the Sunday Telegraph.

To be fair, the fund is a tiddler: just £50m of equity and the same amount of debt to invest in the high-end residential property in London. That £100m will buy no more than two dozen of the sort of flats Nick and Christian are used to building.

The boys, who dispute EG's estimate of their £330m wealth in this week's Rich List (£750m, please! ), have made slightly more enemies than friends since persuading the Qatari's to spend nearly £1bn on the 12-acre Chelsea Barracks site and the Icelandic bank Kaupthing to lend them £175m to buy the old Middlesex Hospital site in NOHO.

Showing admirable, agility the brothers extricated themselves from both developments: developments whose high prices were predicated on their vision of high densities and their estimation of even higher values. 

The 3 empty acres of NOHO is now owned by the administrators of Kaupthing, who are getting Stanhope to come up with a scaled back design. Meanwhile the Qatari's have been forced into a complete redesign of Chelsea Barracks after objections from Prince Charles.

It will be interesting to see: a) if anyone fancies joining the brothers in their latest adventure, and, b) will the Qatari's (who hate a fuss) quietly pay up? Or will they say enough is enough and strike back?

Rivals are convinced that Cushman & Wakefield chief executive, Bruce Mosler, was kicked upstairs to co-chairman two weeks ago by the Italian owners who want to take a firmer grip on the loss-making business. An interview with the jovial 52-year old in the New York Times today does little to dispel that view. "If being kicked upstairs is continuing in the role until we find the right person... and going back to what you're passionate about, then that's O.K."

Rivals are also convinced that the Agnelli family, which controls 68% of the world's third-largest agent through a company called Exor, is seeking what might be called the DTZ solution. In other words "the right person" will be a grim-faced banker like Paul Idzik, the former chief operating officer of Barclays who is now doing his damndest to turn around DTZ into a profit-making business.

Unlike DTZ, C&W suffers ( or benefits) from a lack of transparency in its accounting. But the few brief lines devoted to C&W in the Exor accounts show the 15,000-strong business lost £46m in the first half of 2009 on top of a small loss last year - and that Exor had to provide a $50m loan instead of reaping profits on the purchase made in 2006.

It would be nice to think that a new CEO would usher in a new era of financial transparency. But with an Italian parent, don't bank on it. What is more likely to happen is that Mosler's go-for growth policy that was dashed by The Crash will be replaced by a crawl for profits. If the guys at C&W in the UK want to know what this means - ask the guys at DTZ. It's much less fun.

On September 20th it was suggested here that the Mike Slade was hiding something: that the ebullient MD of Helical Bar was going to start developing again. That it indeed the case - and it is a much bigger way than might be imagined from the statement issued on October 16th, when it was announced Helical was to "advise" Hypo Real Estate on salvaging the old Clifford Chance offices that squat at the western end of London Wall in the City.

Today's Standard column carries a short story which reveals a huge re-build is planned for the 370 000 sq ft of space in which Rreef and Allied London have just spent £60m on an internal refurb in a futile attempt to attract tenants. Prêt a Manger has taken a shop - and, er... that's it. Who knows how many millions have been lost millions sprucing up the clunker of a building that has lain empty for years?

Now a second more fundamental makeover is planned. The dreadful black and dark marble cladding is to be stripped and replaced. There are thoughts of high level restaurants and low level cafes and shops. Much of the new internal works will be stripped. Helical won't just be advising either. It is likely that the listed developer will take a stake and hold 200 Aldersgate until the building is filled and the first rent review is reached.

If you were wondering when large-scale development would begin again in the City of London, wonder no longer. The man who others tend to follow is leading the way. The only thing Slade might be still hiding is a desire to put flats into the block. He hinted at an interest in residential just yesterday in the Times. But, surely not; the City Corporation might have a fit.

Not sure that a fond remembrance of the US Embassy from the 1968 anti-Vietnam war protests was a wise thing for Margaret Hodge to recall when the culture minister confirmed the façade of the Eero Saarinen building is to be listed in today's Building Design.

The news is in fact confirmation of a story in the Standard in July. So, Sir Stuart Lipton will not be surprised. The man still not quite yet officially tasked by the Americans to develop the site can now get on and see how many flats can be squeezed behind the façade - and thus how many millions the listing will cost the Americans. Not that many he reckons.

Perhaps this news will also spur into action those who rashly paid £250m in May 2007 for the former quarters of the US Navy in another part of Grosvenor Square. The consortium, which includes Restaurateur Richard Caring, has gone awfully quiet on the plans for luxury flats that were given the final go-ahead by Westminster council in May. Why?

Will BlackRock be tempted to Canary Wharf by Canary Wharf now Canary Wharf has signed up Macquarie for its off-Wharf development at Drapers Gardens in the City? Who knows the answer to this dizzying conundrum?

But the US investment managers have a narrowing choice of options following confirmation in the FT this morning that the Australian bank is to take 200 000 sq ft at Drapers at £43 per sq ft with four years rent free on a 20 year lease.

The terms of the deal with Macquarie appear a touch above those agreed by Nomura at Watermark Place last month, where the Japanese Bank agreed to rent 525 000 sq ft of Thames-side space from a Canadian pension fund. Here the average rent was £40.50 - and the rent-free four years, not six as reported. The quoted rent at Drapers is £2.50 higher. That perhaps reflects the mild competition between the two financial institutions for the space.

The only oven-ready space of sufficient size to meet BlackRock's 300,000 sq ft requirements, in the City at least, is either one of Minerva's buildings. Walbrook near Cannon Street station is a more likely a candidate than off-pitch St Botolph's near Aldgate tube. But they (maybe) up against Bloomberg, currently in Finsbury Square. Maybe: Because the dithering news organisation told staff last month they are now considering refurbishing rather than moving.

The announcement of the Drapers deal, where, bizarrely, "all parties refused to comment" (who, exactly, do they think they are fooling?) will cheer City agents further and add impetus to the view that someone ought to start building big again in the City. Maybe: On Tuesday old hand John Burns of Derwent London told delegates to the Offices 09 conference that the numbers don't stack up until developers reckon they can achieve at least £55 per sq ft.

There is not a great deal new in a Times story on Simon Halabi this morning. But the paper has found a flattering picture of the man whose property empire has unravelled.

Ask Irvine Sellar. He sold a one-third stake in the Shard to Halabi - and then battled for a legal separation.

Ask Societie General. The French bank lent Halabi £330m to buy the Esporta health club chain - which went into administration last year.

Ask Aukett Fitzroy Robinson. The architects of a six-star hotel at the old In and Out Club on Piccadilly were counter-sued after suing Halabi for unpaid fees.   

Current attention is on the sale of six Halabi properties now in the hands of the administrators and CBRE. These include the Aviva tower and the JP Morgan offices on London Wall. A value of £1.8bn was put on the portfolio when Halabi first announced a sale in September 2006. If only he had sold then, Halabi might not be selling the old In and Out Club now.

How will the sales go? The JP Morgan offices are a tough sell; the bank is off to Canary wharf. The other five blocks are an easier sell. Agent David Martin, of CBRE, tells the Times that  "now is as good a time as ever". Indeed. But JLL have got a much harder sell with the In and Out Club. The guide price of £250m for a derelict site bought in 2000 for £50m with planning for a 160 000 sq ft hotel is pushing it a bit. But then Halabi always has done.

Will the sale of Lehman Brothers real estate assets please begin in earnest? The front page of the FT this morning says that administrator PwC has charged £154m in fees so far for winding up the failed investment bank.

Over at The Times the man in charge of realising Lehman's property assets said he thought that PwC's "default position" on sales was changing from hold to sell, thanks to a speedy recovery in prices.

Former RICS president Barry Gilbertson was talking about the sale of the Burberry HQ on Haymarket to raise cash to pay off the creditors of Rock Investment Holdings, once controlled by Paul Kemsley. Gilbertson suggests here that "the sale provides potential buyers with an incredible chance to secure the freehold of a prestigious property just at a time when the international real estate market is starved of quality."

Indeed so Barry. Now come on. For most papers also report that respectable buyers have begun to jostle with the legion of less respectable opportunity funds for stock. Much in made of the £40m purchase of 39 Victoria Street by British Land. Much is also made of the return of the New Star brand, now in the hands of very respectable Henderson who have got more cash coming in than going out from the general public.

Today's good news may simply add more air to a bubble that will be punctured by a cost-cutting new government next summer. But the fact that the IPD Index is on the rise will only increase the propensity to sell by those who really do hold humungous amounts of distressed property assets: the UK and Irish Banks. Their current default position is to hold on for better prices. Well, better prices have arrived - and they may not last.

Savills recently reported house prices up 8% in central London in the six months to September - and 16.4% up in the south west suburbs. What was not reported is that the London residential agency business had an historic record month for deals and exchanges. Given Alfred Savill started up in 1855, this is quite a record and bodes well for calendar year results due out in MIPIM week next March.

Yesterday the Investment Property Databank reported a 1.1% rise in the capital values of commercial property in September, the largest in three years. Extrapolate that over 12 months and prices will be about 14% higher this time next year. Given that a 14% rise will get at least some out of negative equity or at the very least un-breach loan covenant breaches, this is good news.

Why is it then that nobody quite believes the good news on both residential and commercial property prices will last - and much of the talk right now is of the bubble mentioned here on October 6th? Discussions with five property industry folk over the past week suggest the following reasons:

First, flashbacks to The Great Crash continue to haunt scarred investors. Second, that bubble theory. Third, the unbelievable speed of a recovery. Fourth a firm belief that either political party will make even deeper cuts in public spending after the election that they now promise. Therefore a second dip is coming. Really? How can anyone really know? Nobody saw the first dip. Measures of volume not price are the ones that matter. Watch them.

The Guardian reports today that City bankers use prostitutes to entertain clients. Not just City bankers. Here is the tale of a very well-known figure in the property industry, let's call him Mr A, who was being courted by another very well-known figure in the property industry, let's call him Mr X. A tale told within the last month.

Mr X was very keen to have dinner alone with Mr A. Given that Mr X's unsavoury reputation preceded him, Mr A resisted. But he did then accept an invitation from Mr X to a dinner in Mayfair where there were going to be about a dozen other guests. Towards the end of the meal the butler quietly handed Mr A two sheets of A4 paper folded in half and stapled in one corner.

Mr A opened up the document. On the first page was a list of 25 women. On the second page were comments made about the women by satisfied clients. Stuck to page 2 was a yellow Post-It note from Mr X suggesting that if Mr A came to dinner he could have whichever woman he fancied as a free dessert. Mr A took out his pen and wrote on the note "this is why I will never have dinner with you" and gave it back to the butler.

Simply an amusing tale: yes, if everyone resisted Mr X. But the odds are that over the past 10 years some have succumbed to temptation. Entrapped and compromised they no doubt went on to become involved in property deals with Mr X they would otherwise not have touched with a bargepole. And no doubt one or two of them will have been property bankers.

Sir John Ritblat is not a man to cross. Long-time hotelier Robert Breare seems to have done just that. Today's Times reports that a smallish pub company called Merchant Inns run by Breare has fallen into administration after "the discovery of a number of previously unknown financial liabilities" by Deloitte.

Sir John is the principal investor in the 7-strong chain in which both men invested £1m of equity in late 2007, with plans for major expansion. Breare was also chairman of the Delancey-run luxury hotel group that owns swish spots like Bovey Tracey castle in Devon. Breare left both jobs in August.

Still, it is an ill-wind. Sir John is of course chairman of Colliers CRE. If you fancy buying a posh pub or two, Colliers Robert Barry are the selling agents for Deloitte. Meanwhile don't mention the name of Robert Breare in the presence of Sir John. But if you are feeling really brave you might ask him his views on the dissolution of the retail team at his old firm British Land. Yesterday the trio at the top led by Andrew Jones finally announced they were leaving the building.

The most interesting story to emerge over the weekend is the suggestion in the Independent on Sunday that Lloyds will favour listed property companies over private equity groups when it comes to setting up joint ventures to take billions in distressed real estate assets off their balance sheet.

How much appetite firms like Land Securities and British Land will have for investing in and then working out distressed assets is open to question. This is more familiar territory for the likes of Blackstone and Apollo. But apparently Lloyds fears bad PR from the quick profits that might accrue to the buy and break up merchants.

This tale does chime slightly with the news that unlisted by very respectable Grosvenor has been approached to do a joint venture with Lloyds. Further credibility is added by the now un-ignorable rumours that the bank is close to a rights issue that will allow it to put a much smaller proportion of its £50bn of real estate assets into the government insurance scheme.

This also feels like the sort of thing a reputable bank like Lloyds with a disreputable HBOS portfolio might at least try. It is also not hard to imagine the hand of the major shareholder (HM Government) gently steering the banks away from deals that will lead to headlines in three years time along the lines of "US vulture funds makes killing from Labour's bank rescue plans."

Three straws in the wind that point towards the awakening of the development market in London, first mentioned here on September 20th. The first moderately thick straw was a comment by John Burns in my Standard column on 2nd October. The CEO of Derwent London said the prospect of starting work on a few sites is "far higher up the agenda" and that "we should be looking to deliver space by the end of 2011."

The second admittedly thin straw came from the director of a marketing company met at the annual lunch of the ebullient auctioneer Clive Empson last Friday in Kent. Here 300 guests were treated to an hour long peroration by Lord Digby Jones, the man taken on as a minister by Gordon Brown to promote business. A man it seems now in the business of promoting himself General Dannatt-style to David Cameron.

But let's not ramble. When Jones finally finished, our marketing man admitted he was pitching for the advertising account of a modest-sized lender who now felt it was time to tell the world it was open for business again. Goodness.

The final medium-thick straw appeared late Friday with the announcement that a developer was to start work on a £100m residential scheme in Clerkenwell.

Many speculators were caught holding land parcel bombs that exploded when the great flipping-frenzy ended in mid-2007. Not Mount Anvil. The London developer, who bought the plot from Alfie Buller's Bee Bee developments for £26m, has persuaded Lloyds to divvy up £24.5m to fund 170 private homes with Allied Irish Bank (it lives) financing the 104 social units. Mount Anvil promises to start work next month. Honestly.

British Land (BL) has a crisis on its hands. The UK's second-biggest property company is losing three members of the eight-strong executive board that runs the business day-to-day.

Andrew Jones, Valentine Beresford (left) and Mark Stirling are the trio responsible for 56% of BL's entire £8.6bn portfolio. That news came out yesterday in the Evening Standard.

Today's Evening Standard column discusses the four reasons why the three ex-Pillar men are almost certainly off to form their own retail property fund.

The company has said nothing beyond issuing a statement that Andrew Jones was "considering" leaving on September 24th. That's understandable. It is not beyond the bounds of possibility that one or two of the Pillar Three will be persuaded stay.

But the Guardian suggests that the departure of Jones at least is being delayed by the failure of chief executive Chris Grigg to honour Jones's £800,000 a year contract. Both parties are reportedly consulting lawyers.

It is all over bar the bland statements of mutual regret if that is the case. The trio can go off and make their fortune, just like their mentors at Pillar, Raymond Mould and Patrick Vaughan. But what now for badly-holed BL? Downplay the damage, repair the holes and sail on no doubt. But in which direction?  

BL's course is currently determined by cautious captain Grigg who seems to have both eyes on the balance sheet. During the recent bad weather, fine.

But the former head of Barclay's commercial operations does not seem to have yet plotted a course that accounts for improved conditions. That failure is partly responsible for his deck officers jumping ship. But only partly: a big boring super tanker was never going to be the last ship of the Pillar Three - now was it?

There is only one story today: the one that will appear in the Evening Standard at lunchtime about the defection of not just one, but three members of British Land's executive committee. It is not just retail chief Andrew Jones who is going: he is taking Valentine Beresford and Mark Stirling along with him to set up a new retail fund. This could lead to further defections from the 25-strong retail team and effectively denudes BL of experienced retail property experts.

The implications are grave for both the company and newish chief executive Chris Grigg, who has clearly failed to win over key members of the executive group with his vision for the business. It is understood that there was much dissatisfaction at the sale to Blackstone of 50% of Broadgate for what was seen as a knockdown price. The defections seriously weaken the credibility of Grigg and may well put the whole business into the sights of a potential bidder. Grigg will have to move very fast to stop this happening. Anyone fed up at Land Securities or, more likely, Hammerson?

DTZ's always outspoken head of retail Martyn Chase (pictured) spoke up at the Tory party conference in Manchester yesterday, where DTZ interestingly has taken exhibition space. The man that took Donaldsons into DTZ called Company Voluntary Arrangements "an absolute disaster" at a fringe meeting. He condemned them as "a blatant abuse in terms of the retailers getting off the hook in terms of their property commitments," according to the Telegraph today.

Chase was amplifying the view of his client Peter Miller, chief operating officer for Westfield in the UK. At the same meeting Miller called CVA's a "very negative precedent." He made it clear that that muscular Aussie developer preferred to deal one-to-one with chains trying to wiggle out of leases, rather than risk a vote on the issue with namby-pamby British landlords.

These comments are likely to further strain relationships between the loss-making developer and retail tenants in Westfield London and those that might or might not take space in the 1.75m sq ft centre under construction at Stratford in East London. For there is still simmering resentment at the high service charges and the not-that-wonderful income retailers are getting at Westfield London. 

This has left several large chains determined to screw down terms at Stratford, where M&S and John Lewis are presumed to be paying zero rent for quite some time. There has already been one clash of wills. The always forceful Sir Philip Green of Arcadia apparently asked for the same terms as John Lewis for his string of brands. The spluttering Aussies refused. Sir Philip apparently told them to go forth and multiply - and left the room.

Imagine a small lake of perfectly smooth water, roughly the shape of the UK. Now, imagine a bubble about the size of a ping-pong ball surfacing in a spot where London might stand. OK? Right, you have imagined the real estate bubble described by City property analyst Mike Prew this morning in the Times. Not that the man from Nomura is wrong. Prime yields in London have come in by perhaps 75 basis points in as little as six weeks. It is just that the air in the bubble is supplied by a small number of deals.

The air in the stories that also appear in the FT is supplied by Cushman & Wakefield and Savills. C&W report that the number of investment deals rose by 12% to £1.6bn in Q3. Well, yes. But that appears to include the £1bn transfer of half of Broadgate from British Land to Blackstone. Savills report that the number of banks willing to lend on real estate has almost doubled from 12 to 23 lenders. Well, yes, good news. Or is it?

Prew warns that an increase in the availability of bank lending could lead to trouble. "The action of the banks will create another bubble. Real estate has recovered extremely quickly. Some investors are buying commercial property on the expectation of inflated values in the next couple of years." It would be nice (but perhaps naïve) to hope that the UK's top agents will not pump quite so much air into the bubble this time around. After all, they know perfectly well that its volumes not values that matter.

On Friday the stock market judged Minerva to be worth £67m. This morning the property company holding 1m sq ft of almost-finished developments in the City reported that liabilities of £847m exceeded assets by £46m. Does that mean the £113m gap between what the market thinks the company is worth and what they auditors thought on 30 June is down entirely to the hope value of the two sites at Walbrook in Cannon Street and St Botolph's in Aldgate?

                                                 St Botolphs, Aldgate

Not entirely. But clearly letting and selling the 445,000 sq ft in Cannon Street and the 560,000 sq ft in Aldgate are life or death deals for a business brought back from a near-death experience by chief executive Salmaan Hasan two weeks ago. Then he persuaded the banks to extend deadlines on loans of nearly £700m out to mid-2011: and he was given another £300m to keep going.

This was an extraordinary achievement for Hasan, whose experience as the head of property finance at Deutche Postbank in London will have come in handy. Sterling work. He will of course have been helped by the growing perception that Minerva has two of only five mega-developments in the City, where Cushman & Wakefield said last week occupiers are starting to "jostle for space."

The banks have presumably worked out that the end value of both developments adds up to more than the £570m given in loans. A rough (and generous) calculation using the £40 a foot paid by Nomura at Watermark Place, using a 6.5% yield, shows a small surplus. But that forgets the 4 years rent free given to Nomura. Thanks to Hasan Minerva will survive. But unless yields fall to 5% by his mid-2011 refinancing deadline, the sale of both sites will yield returns that do not add up to the present hope value.

The best story of the morning is not in the papers, it's behind the pay-wall on Bloomberg. Reporters on the wire service have unearthed documents that show RBS and Lloyds had to pour £2.8bn into their Irish banking subsidiaries last year to cover rising real estate losses.

RBS subsidiary, Ulster Bank, and the confusingly-named Bank of Scotland (Ireland) have both been given capital injections of around £1.4bn to cover the collapsing value of property loans. "Many will find it hard to understand why British taxpayers are bailing out bad investments made in Ireland" says Liberal Democrat Treasury spokesman Vince Cable.

Indeed Vince, but it may be worse than you think. RBS had a non-UK commercial property loan book of more than £30bn this time last year. And who knows what crazy overseas schemes the HBOS team poured money into.

PS: Can RBS please explain to a puzzled but pleased German banker why they are willing to sell him perfectly sound loans on deals that have Land Securities as the landlord and Sainsbury's as the tenant? "Because they can" was the answer from one cynic, who pointed out that chief executive Stephen Hester has ordered a 20% reduction in the £90bn property loan book over 5 years. 

Segro today unveils the new management structure of the business, and a lot of job cuts following the takeover of Brixton. Now that is out of the way, what does the future hold for the present and former top managers of the businesses? 

 Well, the case for unfair dismissal brought against Brixton by its former chief executive Tim Wheeler grinds on. Soundings in both camps reveal an absolute determination to fight to the bitter end. 

But perhaps of more interest is that speculation about who is going to take over as chief executive when 59-year old Ian Coull decides he has finished the job of transforming the business. Those close to the company say the man to watch out for is finance director David Sleath. Be nice to him.

The Infrastructure Planning Commission (IPC), which comes to life today, should of course be called the Nuclear Planning Commission.

The overriding reason this new quango was created by Labour is to prevent delays in the power station building programme.

The secondary unspoken reason is to transfer responsibility for making what are highly radioactive decisions as far away from the House of Commons as possible.

But in April Shadow Secretary of State for Communities and Local Government, Caroline Spelman, criticised the £9m a year cost of the IPC and called it a "bit of quango flab".

In September shadow energy minister Charles Hendry pretty much confirmed that a Conservative government would abolish the organisation.

That promise has irritated the CBI who came out yesterday in strong support of the IPC. The Conservative party's position is contrary to the view of anyone in the development sector who has ever been caught up in the timeless and costly world of a large-scale planning application. 

Still, democracy rules: if they win, the Conservatives have indicated they will subsume IPC staff back into the planning inspectorate and give the final decision on projects to ministers.

So, a bit like the way it has worked up to now then. Unless of course the pair have a secret plan to speed up the process they would like to share with the world at next week's Tory party conference in Manchester ?