Commercial Property Blog
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I was invited by Andrew Campbell of Crowe Clark Whitehill LLP to join his client Trinity Elite at Chester Races on 10 May 2012.
As Trinity Elite are a sponsor of Manor House Stables, a joint venture between the footballer Michael Owen and the co-founder of Betfair Andrew Black, I was delighted to learn that I would be joining them in Manor House Stables’ private box opposite the finish line.
The betting proved less successful than the quaffing; in particular as www.trinityelite.com came third in the 3:40. Perrier Jouet Belle Epoque Champagne 1999 (£90) proved to be my favourite: delicate nose; intense, powerful palate; rich white fruits, honey and blossom balanced with autolytic complexity, brioche and hazelnuts; a good finish; and also pretty generous as an all-day offering!
I subsequently met up with Martin Totty of Trinity Elite and a friend to discuss, among other things, tax led property investment schemes. The venue, Amba in Hale, Cheshire, was chosen in part because of its reasonable rate of corkage (£10).
I brought a bottle of Chateau Lynch Bages 2006 (£80) which was sadly just ever so slightly out of condition. I bought a case of the 2006 en-primeur long before Lynch sky rocketed in price and have kept it since then in the far from ideal conditions of a ‘Kent cellar’. Ideal conditions being: (a) bottle on its side lying down; (b) 8 - 13° Centigrade; (c) in the dark; and (d) away from vibrations. Absent the key element (b), my Lynch had suffered and whereas it should have been “full-bodied palate, with velvety tannins and lots of blackberry and mineral fruit character” it was enjoyable enough but without the grace and power that I would expect from Chateau Lynch Bages.
Fortunately, Martin was generous enough to bring a bottle of Chateau Carruades de Lafite 2003 (£250) which had been bought, like my Lynch, en-primeur in the days when Chateau Lafite Rothschild’s second wine was also affordable.
The high percentages of Merlot in the blend (50% Merlot, 48% Cabernet Sauvignon, and 2% Cabernet Franc) are unusual for Pauillac, being more common in Margaux , and may have lent the wine an advantage in the notoriously hot vintage of 2003. As Merlot is picked far earlier than Cabernet Sauvignon and Cabernet Franc, the wine has largely avoided the baked excesses of France’s hottest summer for a century. In the glass: rich black cherry, cassis, tobacco, ground coffee beans; silky tannins; balanced alcohol; and an exceptional length. The only negative is the price.
We finished with a dessert wine from the Sauternes appellation of Bordeaux, Chateau Suduiraut 1990 (£60). The Chateau is planted on sand and gravel soil with 90% Semillon and 10% Sauvignon Blanc. The grapes are encouraged to develop noble rot, a form of fungal infection, which has the effect of raisining the grapes and concentrating sugar levels. The shrivelled grapes are then hand-picked and sorted to ensure perfect noble rot condition. The wine: dark gold colour; high acidity, alcohol and sweetness brought together in a perfect balance as a fitting end to a perfect lunch.
I returned from holiday the week before last jet-lagged but satisfied having visited a number of Australia’s most prestigious wine regions.
The Barossa Valley stood out because of the number of great estates that I was able to fit into a single day. These included, among others, Penfolds, Henschke, Two Hands and Torbreck.
Penfolds and Henschke are, of course, famous for the iconic 100% Shiraz wines Grange (2006 - £220) and Hill of Grace (2006 - £370).
Sadly, however, neither wine was offered for tasting which was a pity considering that I had travelled almost 10,000 miles to visit their respective producers.
Two Hands’ highlights included an interesting Moscato called Don’t Tell Richard (2011 - £13.00) and their flagship wine Ares, a Barossa Valley/McClaren Vale Shiraz (2008 - £95.00).
The tasting area was by far the most hospitable of the trip comprising a teak deck overlooking the vineyards with an outdoor wood-fired pizza oven in situ to provide a welcome companion to Two Hands’ wines.
Torbreck’s founder David Powell named the estate after a forest in Inverness where he worked as a lumberjack and followed a similar train of thought with the wines, the majority of which also have Scottish-influenced names.
The notable exception is an unoaked Grenache Shiraz Mourvedre blend Cuvee Juveniles, which is named after Englishman Tim Johnston’s wine bar in Paris.
The standout wine Runrig (2007 - £110.00) was superb: rich dark purple colour; black fruit and sweet spice on the nose; hints of dark chocolate on the palate; silky tannins; and a long finish. This could undoubtedly be enjoyed 20 years hence but could equally be drunk today if you prefer your wines younger. More affordable offerings include The Steading (2006 - £35.00) and The Struie (2007 - £45.00) and interestingly Fortnum and Mason’s Barossa Valley Shiraz (2009 - £14.90) which is made for them by Torbreck.
Coonawarra will be remembered more for a £200 speeding ticket that I received on the John Riddoch Highway than for wine though I enjoyed visiting Yalumba.
The Yarra Valley will be remembered for Yarra Yering. Yarra Yarra Dry Red Wine No.1 (2004 - £51.00) has to be one of the most undervalued Bordeaux blends available comprising Cabernet Sauvignon, Merlot, Malbec and importantly the highly tannic Petit Verdot. Dry Red No.1 is deceptive as if tasted blind a taster could be forgiven for identifying it as a classified growth from Bordeaux rather than as a New World blend. Yarra Yering Dry No.2 (2006 - £50.00) a classic Shiraz/Viognier blend also stood out though it was hard not to be influenced by the view from the glass fronted tasting room over the Yarra Valley as I evaluated the contents of my Riedel glass.
I would recommend anyone visiting Australia to take the time to visit several of its wine regions as in addition to wine there is a lot to see and do though you should of course remember the speed limit as your money is better spent at the cellar door than with South Australia’s police.
Mark Lewin of IFG International Limited invited me to join him at Berry Bros. & Rudd, 3 St James’s Street for an evening entitled ‘France versus the New World.’
The Napoleon Cellar is a particularly appropriate venue for such an occasion as it was here that Louis-Napoléon Bonaparte, as Napoleon III, founded the Deuxième Empire in 1851. It remained to be seen whether France would prevail this time around on the battleground generously provided by IFG.
I started with a white Burgundy: 2009 Mâcon-Cruzille, Clos des Vignes du Maynes, Soufrandière, Bret Bros. (£24.50). Plenty of oak on the nose, balanced with a good dose of citrus fruit and acidity on the palate; but, overall a touch one-dimensional. I preferred the less expensive Australian 2008 Toolangi Vineyards, Estate Chardonnay, Yarra Valley, Victoria (£18.50) as it offered a richer range of ripe fruit on the nose and palate. In addition, the oak was far less dominant adding complexity and length rather than overpowering the wine as with the Mâcon-Cruzille making it an easy call to give the New World its first point.
Pinot Noir was far closer. I expected 2007 Nuits-St. Georges, Clos de la Maréchale, 1er Cru, Domaine Mugnier (£49.00) to walk it: buckets of red fruit on the nose; floral characteristics on the palate; good weight; firm tannins; and a good length. I really enjoyed drinking this wine with several of the spicier canapés. The 2008 Mountford Estate Pinot Noir, Waipara (£38.95) was, however, not going to concede without a fight: intense ripe red fruit; impressive structure; silky tannins; acidity; and length. The Mountford Estate was declared the winner; first, on the basis of value for money, and secondly the fact that it could be enjoyed more easily without food making it 2-0 to the New World.
The playing field was far from level for the final round: Bordeaux blends. Australia’s 2007 Yarra Yering Dry Red No.1., Yarra Valley, Victoria (£51.00) did not stand a chance against a mature Bordeaux Second Growth from a legendary vintage: 1996 Ch. Gruaud Larose, 2ème Cru Classé, St. Julien (£118.00). As much as I love Yarra Yering, having taken delivery the same day of a case of 2005, bought through Berry’s online brokerage platform BBX, the density of black fruit, liquorice, tobacco and sweet spice flavours of the Gruaud Larose prevailed.
The final result 2-1 might appear to favour the New World; however, the French, as ever, have a joker to play. As all of the New World wines are aged in French oak a rebalancing of the scores would seem to be fair; suggesting a score draw as a more politic conclusion. Louis-Napoléon Bonaparte would, no doubt have, approved.
Today is a key day in my US road trip. I am presenting to members of the Northern California CoreNet Chapter and the Urban Land Institute at the PG&E Auditorium in the beautiful city of San Francisco. My task is to provide an outlook for the EMEA office market from the standpoint of a corporate occupier.
Fellow speakers from all the major service providers are doing so for other regions of the globe. But there is no doubt that there is an intense focus on Europe given the ongoing debt crisis (although interestingly in the introverted mainstream press here in the US the crisis is somewhat absent).
In thinking about my presentation, it struck me that the city of San Francisco presents a perfect metaphor for Europe. It does so in perhaps three ways.
First, San Francisco is of course a city that suffers from more than its fair share of fog. In Europe over the last year we have had a substantial fog of our own. It is an analytical fog brought on by a myriad of often contradictory economic indicators or studies. It has therefore proved somewhat difficult to fully quantify the magnitude of the problems facing European economies; the precise direction that those economies are heading; or indeed the pace at which these economies are proceeding. The fog has become a real pea-souper given the political rhetoric and positioning that is so often associated with these metrics and interpretations. As I have said consistently since arriving here, the political economy of Europe is far more of an issue (and of greater interest) than the pure economics.
Second, it is clear that Europe since the global financial crisis in 2009 has been on a long and winding path to recovery. It’s a path that makes navigating San Francisco’s famously winding Lombard Street look pretty straightforward. Indeed all streets of San Francisco, offering as they do inclines at every turn, point to what is ahead for Europe – a long, gradual and challenging climb back to prosperity.
Finally, despite the aforementioned fog, it is abundantly clear that Europe has a sizeable debt problem. Dealing with this whilst maintaining some degree of economic growth, makes escaping from San Francisco’s notorious off-shore penitentiary, Alcatraz, seem like a bit of a cake-walk.
So as I take to the stage with my peers, I aim to tell it exactly as I see it. It pays to be straight but bold in these situations. I believe that Europe, and the Eurozone more particularly, continues to walk uneasily along a tightrope. On one side of the rope is a return of corporate and consumer confidence amid a political resolution of the crisis and a mild but sustained upturn in fortunes built on the back of the private sector investing some of the cash pile it has built up over recent years of repair. There is about a 1 in 5 probability that Europe, when it falls from the tightrope, falls in this direction.
On the other side of the rope is a much darker place where the crisis deepens, a bank, banks, country or countries fail leading to a full or partial break-down of the Eurozone and a deep and sustained recession that reverberates globally emerges. The probabilities are stronger – about 30% and rising – that Europe slips from the tightrope into this darker place. The bets are strongest that Greece will be the one to fail – particularly if a deal cannot be struck with private creditors. This Greek Tragedy might be, if one takes a longer term and broader perspective, the very stimulus required for politicians to bring an end to the muddling through mentality that afflicted the year of summits in 2011 and provide a real leap forward. The risks of not doing so will mean that the fog becomes thicker, the path evermore steeper and twisting and escape even more unlikely.
The ramifications of this are significant for everyone in the auditorium today. Although only 12% of US exports are to the Eurozone and the US is a relatively closed economy with total exports only representing around 10% of GDP; the much-repaired US banks will be exposed to the Eurozone periphery to some extent. A breakdown of the Eurozone – either partial or full – could serve to dramatically alter the current US GDP growth forecast of 2.5% for 2012 and leave a pre-election US economy walking a tightrope of its own.
Lee Elliot is head of EMEA Occupier Research at Jones Lang LaSalle
Recent months have seen a slew of UK retailers including Thorntons, Mothercare, Comet, Dixons and announcing plans to abandon high street stores, often in favour of out-of-town retail parks.
It is all too easy to say that our high streets are doomed – but not every retailer is in exodus mode, and displaying commitment to the high street is gaining political significance.
Retailers who are expanded on the high streets tend to occupy one of two spending extremes – discount or luxury.
In more affluent areas, independent retailers are making headway, but the real volumes are at the discount end. Poundland, Poundstretcher and B&M Bargains are seeking hundreds of new stores.
There is also active demand from pawnbrokers, and BrightHouse – a modern day version of Radio Rentals which offers “rent to buy” deals on flatscreen TVs and Blackberries to the credit-impaired – is seeking 30 high street stores. But that’s not all.
This week, M&S chief Marc Bolland showed that he realises how important high street stores are to elderly shoppers.
The first big point he made in his address to 2,000 Middle Englanders at the retailer’s AGM this week was that M&S remains committed to the high street. “We have 219 store in the high street which are doing well, we are the anchor of the high street and we are going to invest in [upgrading] our stores,” he said to welcoming nods of approval from oldies.
You can imagine the political stink if M&S “did a Mothercare” and abandoned lesser towns, some of which would probably never recover.
Primark, which reported positive trading figures this week, also thinks the high street is the best place to trade from, and stands to swell its floorspace by 10% in the next year, taking giant stores in Edinburgh and London’s Oxford Street.
Granted, you’d struggle to describe the latter as a high street, but finance director John Bason tells me that the high street’s “higher footfall and convenience” is what guides the chain’s property strategy.
Sports Direct also reported positive numbers this week. It is in the process of revamping its high street estate, and has freshened up its image by snapping up designer high street chains USC and Cruise, into which it will sink £20m of fresh capital.
So the retailers are still spending money on the high street – let’s hope the shoppers follow suit.
Property Week is calling for entries for the RESI Awards 2012 - a celebration of excellence in the residential sector. Taking place on 15 May 2012 at the InterContinental London, Park Lane, the RESI Awards will welcome leading figureheads to celebrate and network at this truly unrivalled industry gathering. For further information on the categories and entry criteria please follow this link.
It’s been a relatively busy month of tastings and wine related events already so I thought that I would focus on a selection of highs and lows.
Corney & Barrow’s Christmas tasting at The Tower of London started the month on a high. There were a lot of wines worthy of mention but by far the best was a Blanc de Blancs Champagne, exclusive to Corney & Barrow, Salon 1999 (£215.00): pale gold colour; rich nose full of coconut, green apple, vanilla and brioche; delicate palate; and a long complex finish. The price reflects the miniscule production of Salon; however, for those wanting a more affordable substitute Salon’s sister house Delamotte’s Blanc de Blancs 1999 at £39.99 is good value.
Justerini & Brooks’ Rhône 2010 tasting at The Vintners Hall introduced a relatively new producer Chêne Bleu, whose wines were impressive. The Viognier 2007 (£25.00) stood out, in particular, because of its nose which was reminiscent of a fine perfume rather than a fine wine: intense floral characteristics; tangy citrus laced with fruit and spice on the palate; and a crisp lingering finish. I would have liked to have tried it with a couple of mince pies.
If only I had purchased the case of Mouton Rothschild 2008 which brought me to Paris on 17 November from Corney & Barrow or Justerini & Brooks. I would not then have had to appear before Le Juge de Proximité at 4 Place du Louvre at 09:30 as the wine would have dutifully arrived as ordered. I had hoped for a swift judgment in my favour following my well-rehearsed petition for two reasons. First, the delinquent French wine merchant www.1855.comhad failed to deliver the wine pursuant to an Ordonnance d’Injonction de Faire that I had obtained on 20 July. Secondly, the fact that almost every other matter before the tribunal involved the same defendant could hardly have helped 1855.com’s position. I was hopeful of a result but, as I am all too well aware, litigation carries risk: I was wrong. The company was given until 16 February 2012 to deliver my wine: unbelievable.
Lunch at Rhône-influenced Willi’s Wine Bar on Rue des Petits Champs was also a disappointment: poor service; average food, meat overcooked and undercooked respectively; and extremely expensive wine. The cheapest red on offer was €44.00 and came from a producer that I did not recognise.
I will return to Paris for Round 2 with 1855.com on 16 February 2012 and, armed with a bit of luck and a better restaurant recommendation, I might have cause to crack open a bottle of Salon (award of damages depending).
We have had a housing crisis for at least three years and in the short term it can only get worse. This Government continues to meddle with the planning system blaming it for all its woes whilst completely ignoring the role of the bankers and its own politicians with their five year view on policy formulation constantly aware of the backlash from their nimby electorate. We have the current planning ministers running scared of the latest campaign run by the Telegraph objecting to the draft National Planning Policy Framework and the presumption in favour of sustainable development, a policy that George Osbourne sees as ‘’imperative’ for Britain’s economy.
On the one hand we have the Chancellor blaming the ‘slow and inefficient’ planning system for the lack of growth and is supporting reform whilst the Tory heartlands are in and around the South East of England are vociferously objecting to any reform that will encourage any form of development that would impact upon their communities. The National Trust, English Heritage and the CPRE are spreading scare stories about development covering the countryside and encroachment upon the Green Belt whilst this is far from the truth and they are praying on the Nimby’s greatest fears to stoke up a campaign which sees yet another U-turn by this Government.
Only time will tell if minister’s are strong enough to resist the calls of these self interested groups or whether they capitulate and dilute the NPPF to such an extent that it becomes yet another muddled and ineffectual piece of planning policy guidance adding to the litany of obfuscation and uncertainty from this Government impacting upon the already fragile recovery.
There are a number of factors that impact upon the housebuilding industry and yes planning is one of them however perhaps of greater significance is the impact of the banking industry however this Government have shown a great reluctance to instigate any banking reform whilst tinkering with the planning system was perhaps seen as the easy option but this is now no longer the case.
The Australian wine producer Penfolds held an event at The Hospital Club in Covent Garden to celebrate the career of the legendary producer Harvey Goldsmith CBE.
The evening began with Harvey talking about his ‘vintage year’ 1985; being the year he produced the Live Aid concert with Sir Bob Geldoff raising over £160 million for famine relief in Ethiopia.
By the time Harvey had finished talking about his impressive career in the music industry, I had almost forgotten about the planned wine tasting.
The tasting to follow did not include the bottle of Grange 1985 that Penfolds gave to Harvey as a token of appreciation for his charitable endeavours and time.
I looked up Grange 1985 on my return home that evening to discover that Robert Parker considered it a more ‘restrained’ Grange with a lot of life ahead of it. Interestingly, Penfolds suggested that it was at its peak and to be drunk within 2 years. At £250 per bottle in the brokerage market, I expect that I shall never know who to believe though I would tend to rely upon the producer rather than Robert Parker.
The tasting included a wide range of Penfolds’ wines but I will focus of those that stood out.
At under £9.00 a bottle, Koonunga Hill Autumn Riesling 2008 is a bargain: pale lime green; characteristic petrol and floral nose; rich minerality balanced with a good dose of acidity; and a long finish. It paired well with the micro fish and chips on offer and with its retro 1970’s label was appropriate given the numerous anecdotes from that period that Harvey had shared with us that evening.
Penfolds Bin 28 Kalimna Shiraz 2008 was similarly impressive: rich purple black colour; full-bodied nose with lots of black fruit, cedar and spice; powerful palate and finish. Again, good value at £13.50 per bottle.
Head and shoulders above the rest, however, was Cabernet Shiraz Bin 389 often referred to as ‘Baby Grange’ or ‘Poor Man’s Grange’: dense purple colour; a wide assortment of black and dried fruits on the nose; complex, structured palate; and long finish.
At £35-40 per bottle it is not cheap; then again, as a ‘super-second’ it is not expensive either compared to £150 for a bottle of Petit Mouton 2008. I didn’t get the chance to ask Harvey what he thought about Bin 389 but he didn’t strike me as a man to settle for anything other than ‘Number 1’.
I arrived up from London on Monday afternoon, registered for the main conference and prepared my material in readiness for the busy day I had on Tuesday.
As I had nine meetings scheduled for the following day, I decided to have a rather demure evening with a firm of lawyers that works on behalf of some of our Shopping Centre Fund portfolio.
In order to start the day in the right way I had an hour work out at the gym at my hotel and bumped into Stuart Moncur of Cushman & Wakefield who was going gold on the treadmill! With endorphins engaged I was ready to start the day!
After breakfast with a former joint venture partner, I had four successful meetings. Happy with the progress made, I headed over to view my colleague Andrew Rich chair a seminar on “where to find investment performance”. The conclusion was that prime shopping centres remain a solid investment for income but if you have the appetite then opportunities in secondary could drive out performance in a few years.
After a lunch with the BCSC New Generation committee members I went back to the conference to conclude my meetings.
The sentiment I left with was that there are a number of acquisitive retailers willing to lease space at the right schemes, albeit there is still a big conversation to be had on rental level and the overall packages being offered.
It was encouraging to speak to a number of emerging retailers who are seeking to expand in a rather difficult market: A welcome positive in a world currently filled with far too much doom and gloom!
We’re all gearing up this end for the BCSC Conference next week.
It will be strange going to the conference in September rather than November as in previous years but hopefully there could be a prospect of signing retailers up before the end of the year!
I have spent the past few days prepping and checking final arrangements; I anticipate that it will be the busiest it has been for a few years based on the conversations that I’ve had with a number of retail agents.
The main focus for me will be to engage with retailers and their advisors in order to be best placed to promote our schemes, listen to their requirements and make informed judgements (while of course making sure they are a sound fit for us too!). I have had some very positive conversations to date however I am not going to prejudge sentiment prior to the event.
It will be interesting to understand the proposed expansion plans of the retailers at this year’s conference as much has been written about the economy over the last few months; just today, ONS has released August retail sales growth figures which reveal a marginal fall of 0.1% in retail sales volumes compared to last year, leading to weak consumer confidence; I am interested to see how this plays out on sentiment next week.
I’m looking forward to this year’s conference and updating you further on my Blog as the week progresses.