As normal this Friday, I’ve noted here the five stories from the commercial property and construction world that have particularly caught my eye this week. Enjoy.
Land Securities sees reasons for some optimism.
A recovery in commercial property values will be characterised by “ripples rather than pure straight-line growth”, the head of Britain’s biggest property group said this week. Francis Salway, chief executive of Land Securities, said that slight fluctuations would be part of an overall rise in the values of shops, offices and warehouses over the next five years from the low in July 2009. His comments will soothe investors, who had begun to fear that a mini “bubble” in values over the past few months could burst and send values down again. On the back of signs that London’s West End is likely to recover first, Land Securities said that it had committed to starting work on three new schemes with a combined total development cost of £700 million: Park House W1; Selborne House SW1; and Wellington House SW1. However, its approach to other acquistions and development is “to be patient and wait for the right opportunities”. Mr Salway said that he expected a “broader range of opportunities to emerge once banks begin to take action on their property portfolio loans”.
But First Quench Administrators have to close 381 more sites.
The joint administrators of First Quench, which trades as Threshers, Wine Rack, The Local, Haddows, Bottoms Up and Victoria Wine, announced the closure of a further 381 stores. This will result in 1,908 redundancies within the stores which are closing and a further 34 redundancies at First Quench’s head office in Welwyn Garden City. We are now in advanced talks regarding the sale of the business with a number of interested parties and have ascertained that parts of the portfolio, consisting of just over 500 stores, are of interest to these potential purchasers,” said Richard Fleming, UK head of restructuring at KPMG and joint administrator. “These stores will continue to trade while we progress with our negotiations. “Unfortunately there has not been sufficient interest in these 381 stores as part of the going concern sale, so we have no option but to close them”.
Woolworths name might return to High Streets
Woolworths could return to the high street under a plan by Shop Direct group, the owner of Littlewoods, to establish a chain of 200 stores. The high-street institution closed this year, at the cost of 27,000 jobs, and left more than 800 empty premises. However, a year after Woolworths fell into administration, Shop Direct, which owns the Woolworths name, believes that there is room for up to 200 stores under the famous red logo. The home shopping retailer, owned by Sir Frederick and Sir David Barclay, bought the name from the administrators and resurrected it online. It wants to hear from possible franchisees. It is not considering managing the stores itself. Mark Newton-Jones, the chief executive, said: “In the new year, we will consider approaches from interested third parties. We believe it could be a successful chain of up to 200 stores, supported by the buying power of the Shop Direct Group.” Shop Direct paid £7 million in February for the Woolworths brand name and Ladybird, its childrenswear brand
CBRE report that sale & leasebacks..are back
Corporate sale-and-leaseback transactions have maintained a prominent role in the European property investment market despite the downturn, according to a new report by CB Richard Ellis. John Wilson, head of Corporate Strategies within CBRE’s Global Corporate Services business, said: ‘The sale-and-leaseback market has continued to prosper despite investor caution because these transactions create long and well-secured income streams for the purchaser and often involve prime assets – precisely the kind of opportunities investors are looking for at the moment. ‘What we have also noticed is that these transactions are expanding across more countries and business sectors. We were working on around EUR 1.5 bn of deals in this area in mid-2008, and this has climbed to around EUR 3 bn this year,’ he said.
A move from JLL to Cushmans
It was announced this week that Jones Lang LaSalle’s head of West End office agency will be joining Cushman & Wakefield. George Roberts, who joined JLL in 1995, will be in charge of Cushman’s London occupier team. His role will include managing Cushman’s services for London occupiers and advising landlord clients on an occupier’s perpsective. James Young, head of Cushman & Wakefield’s office agency team in London said; “George has an exemplary track record in advising both occupiers and landlords in London and brings a unique skills set and an in depth understanding of the occupier sector.”
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