Commercial Property Blog
All posts from: September 2011
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!
I am currently standing in the C&W stand kitchen writing this it’s the only spare and quiet space on the stand!
Day two at BCSC has been busy everywhere, particularly on our stand during the wagamama feeding frenzy! All jokes aside we must thank wagamama for a superb effort at lunchtime today cooking food for over 300 people and spreading the word about the requirements for their ‘aggressive’ expansion over the next few years.
In the main conference, David Smith of the Sunday Times kicked off with a balanced view of the economy which was reinforced by Sir Richard Lambert (ex-CBI chief) who called for more entrepeneureal zip!
Kensington and Chelsea Council Leader (also local government chief) referred to the zip his council was putting into a new Exhibition Road area through his ‘naked streets’. Roger Madelin robustly rounded off the day suggesting that sex, from mixing cultures, occupations and uses, was the clear foundation for Kings Cross mixed-use development
All of the panel sessions were fully booked, with Next making themselves famous within the conference for their positivity regarding the market. It’s been highly refreshing to hear no mention of the double dip, people are clearly seeing a more upbeat outlook and are keen to get on and do business.
A great example of this is House of Fraser who impressed in their presentation with talk of their ‘affordable luxury’ offer, expansion into the Middle East, store refurbishments and their new UK offer ‘Buy and Collect’.
The first buy and collect store is opening in Aberdeen in three weeks and we’re working hard with them on the second store opening (location to follow). The freestanding stores will offer changing rooms and collection points, we can’t wait to give them a try!
In the exhibition hall it’s been very evident that the supermarkets are out in force this year with a lot of chat about Morrisons’ and Asda’s expansion plans. There is no question many developers are refreshing new and old development projects and out market testing occupational demand. Even if a small amount of this moves forward we can look forward to a leasing frenzy at BCSC in 2015.
Quality stands from Land Securities, CSC and Hammerson showcase the product, both existing assets and pipeline. All the principal UK multiple retailers are here, happy to talk shop. All in all, a good buzz around the place.
Everyone is gearing up for a big evening of drinks, dinner and networking.
After a quiet first couple of hours, giving a sense of opening night at the theatre, the BCSC conference has got off to a fantastic start with a busy first day.
The two big questions being asked are ‘what’s next in the retail development pipeline?’ and ‘what on earth are the police doing with fire extinguishers and bottles of beer outside the conference centre?!’
It’s been great to see so many retailers visiting our stand and it seems BCSC have got it spot on with the theme ‘evolve: time to think differently’ if the discussions going on about how to do things differently are anything to go by.
The retailer stands offer something for every appetite especially ‘food store corner’ where Tesco, Asda, Waitrose, The Co-Op and Morrisons are all going strong with their stands.
Interesting to see the different treats being offered by the stands this year, there’s literally something for everyone with Asda handing out doughnuts, Morrisons decorating their stand with fresh vegetables and Poundland lining the walls with boxes of chocolates!
One trend we’ve noticed already is the number of towns taking the initiative to come along to BCSC and exhibit. Northwich, Daventry, Peterborough, Newport, Woking, Tallaght, Guildford, Stoke, Scunthorpe, Evesham, Coventry and Warwickshire all getting in on the action.
We see this as the start of a new trend for the future with towns developing their brand rather than relying solely on developers, lets watch this space and see how many are here next year! The Realis/ City Sentral stand being a great example of town centre promotion.
We’ve embraced all things digital on the C&W stand this year with a social media display giving the latest updates on BCSC and the retail industry from Twitter, intriguing to see the human side of the conference with everything being tweeted from people’s journeys to Manchester and rumours of celebrity appearances from Vanilla Ice and CBeebies!
The QR codes issued by BCSC in the show guide are a great step forward too and it makes us wonder what technology will be in use at future BCSC conferences and indeed in the shopping centres of the future.
Welcome party starting in a minute, everyone in the mood to party and do some business.
Like 1800 other people, I am heading up to Manchester again for the BCSC Conference & Exhibition. It’s always a great event, pitched somewhere between academic and educational excellence, marketing and sales excess and party extreme. The bridge between all of the activities is the opportunity to network, socialise and banter!
The programme for the three days is built around the theme Evolve – time to think differently. I think BCSC have pitched that absolutely right given the challenges the retail industry currently faces. A difficult economy, stalled development programme and many declining high streets. This certainly requires a different approach and new thinking.
Kaye Adams TV and radio broadcaster will therefore have to work hard in her role as conference facilitator to draw out these new ideas, different thinking and most of all stimulate ideas around solutions.
The conference sessions will focus in particular on three themes:
Firstly, the economy and how the Government and industry can stimulate growth in the property sector.
Secondly, the ongoing debate regarding the benefits and drawbacks of the national planning framework and localism agenda under the Coalition Government.
Thirdly, the approach to regeneration and how to stimulate viable retail development and put some shape on the future of our town centres in the light of the Portas Review.
The emphasis in the exhibition hall has shifted from selling new development space, to a renewed focus on active asset management and recycling and enhancing existing assets. This has not stopped a sell out of the stands with the usual strong showing of the major property companies and agents, with retailers this year exhibiting being Asda, Poundland and Morrisons.
I will personally be interested to feel the “pulse” of the industry, and get a better sense of the consensus of where people think the best chance of renewed development activity will be – large city centre eg Sheffield or smaller market town centre eg Hinckley, where development proposals are on the blocks. Sources of development finance will be critical.
The opening of Stratford City this Tuesday is a fantastic boost and I will be interested to hear feedback on the scheme, and initial thoughts on potential retailer performance.
I was there for the opening and congratulations to all at Westfield, CPP and APG. It was a “stella” event. Particularly notable was the in-store atmosphere created by some of brands like The Sting, Apple and All Saints and by Westfield in the Great Eastern Market food hall area.
It will also be interesting to hear more context on the supposed occupational north/south divide. For me however, the key issue is the future role of some town centres in a social context, and in what form and quantity can retail play a part in that.
In many respects this offers to be an even more stimulating conference than previous events, where the focus was on regeneration through development boom and shifting large quantities of floor space. The issues facing the industry now are far more complex, highly political and socially challenging as evidenced by the recent riots around the UK.
It will be interesting to see how BCSC and particularly the exhibition evolves in the future, with perhaps the opportunity for local authorities and bodies interested in promoting town centres may be taking a more central marketing role?
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.
With Mary Portas on the case to save our nation’s high streets, there is already a lot of defeatist talk in the property and retail industries about what her report can meaningfully achieve. But the naysayers who claim the high street is beyond redemption should check out their local corner shop.
Paypoint, the company that provides the technology to let you pay your gas bill and top up your phone in your local newsagents, has a new service. It thinks it can tap in to the internet shopping boom by dealing with the least convenient part – the delivery.
We can order virtually anything over the internet these days, but the frustration of missing a delivery, or humping parcels home from the office on an overcrowded tube, is to become a thing of the past. The new service, called Collect Plus, means your parcels can be delivered to 3,500 participating corner shops in the UK. Even better, the shops also handle returns of unwanted goods – the other great disadvantage of internet shopping – thus avoiding an hour-long queue in the local post office. ASOS, the internet clothing giant, has been one of the first to sign up.
Great for the shopper, who can pop in on their way home and collect their stuff. And great for the shop keepers, who have another income stream, and hope the increase in footfall will boost sales of other products.
Unsurprisingly, the supermarkets are also echoing this trend. The likes of Tesco and Sainsbury’s have been quick to take local convenience stores, expanding into suburban areas. And this week, Sainsbury’s has announced a “click and collect” service for electrical and household goods ordered via its website at a network of 800 stores, large and small, by Christmas. This “multi channel” approach to shopping has served big retailers like Argos and Debenhams very well; shoppers love the certainty and convenience of knowing they will get their goods, rather than the heart-sinking moment of seeing a “missed delivery” card on the doormat.
Ultimately, it’s good for retailers as well, as the cost of rearranging deliveries and administrating the return of unwanted goods eats in to profits. And if the local high street is being used as the collection point, that has to go a step towards bringing back the lost “bustle” Mary Portas has been ordered to investigate.
Did you catch Jeremy Paxman’s Newsnight on Tuesday evening this week? They did a piece on the future of the UK high street and caught up with Mary Portas on her travels around the UK, albeit that she appeared to find the intervention of the BBC’s roving reporter rather irritating!
Statistics banded around included the statement that 14% of UK high street shops were now vacant, this accounting for 29,000 buildings.
The towns suffering the most in terms of voids in the grip of the current recession were stated as Dewsbury, Margate, Rotherham, Hartlepool, West Bromwich and Dudley.
It is not surprising that these are towns which are economically challenged in terms of industry, business and economic prospects coupled with unemployment issues. In the retail context, it is relevant to note that many of these towns have been impacted by other significant retail developments.
Dudley and West Bromwich have not really recovered from the development of Merry Hill. Similarly Rotherham was caned by Meadowhall and Hartlepool by competing developments in Newcastle and out of town around Middlesbrough.
One can reasonably take the view this is simply market forces at work and the survival of the fittest.
We heard some brief glimpses from Mary Portas into some of her thinking coupled with other observations from the Newsnight panel guests which included Rodney Fitch.
They concluded that we may have to “give up on some towns”; we are into a period of permanent change; town centres will not have the mix we have seen over the last 20 years; conversion of retail to residential and other uses appropriate in a general social context but not necessarily commercial, would become common place.
This is a sentiment echoed earlier this week by Francis Salway, Chief Executive of Land Securities when speaking at the annual EPRA Conference “there is going to be a decade of significant change and there will be some permanent losers in terms of retail property as we have seen it across a number of high streets across the UK”.
Much of the blame for the place we find ourselves was parked at the doorstep of the foodstores, development of out of town shopping and perhaps surprisingly that simply some local shop keepers do not do things well enough.
Improved accessibility coupled with quality and free car parking will be key to what Rodney Fitch stated the country needs, which is “healthy shopping is the issue, not healthy high streets”.
The great man retains his retail passion summing up with the unforgettable statement “shopping is the purpose of life”. All of us involved in the retail industry do of course fully agree!
Londoners have been impressed with the success of the Notting Hill Carnival; the event was cited as an opportunity for London to demonstrate it is still capable of celebrating the city, and its multicultural personality, despite the recent riots.
In many ways it was perfectly timed to come a few weeks after the riots to provide an essential fillip to the city, de-moralised following the destruction.
The impact of cultural events such as these is difficult to measure and yet, for many people, it is one of the most valuedpart of their lives. While the short term benefit of the Carnival following the riots is in the spotlight now, the long term benefits of the event, spreading a belief in multicultural Britain as well as the more practical benefits to business and tourism, is surely where the major impact resides. The success of the Carnival should therefore make us pause to consider whether more robust policing and harsh sentences are only way to tackle the underlying issues that caused the riots.
Authorities have a tendency not to take cultural forms of civic mending seriously because of the difficulty with measuring impact; yet, for David Cameron, promoting ‘well-being’ is supposedly a key part of the way we build thriving, successful communities. Cultural activity is one of the main tools we have in achieving contentment with our lives and the places where we live. Indeed, it may be mobilised to tackle the very causes of the riots themselves, feeling of alienation among young people, low civic awareness, high youth unemployment, poor skills and the lack of capacity within many disadvantaged communities to engage in civic activity. It is these problems that need to be addressed if people are to start to put their communities first, rather than themselves. Yet it is an area the government seems nonchalant about.
People must be allowed to find their route to productive and worthwhile employment, and increasingly this may lead us away from conventional channels. The coalition’s conservative instincts in the classroom have closed their minds to imaginative solutions. The withdrawal of funding from Creative Partnerships and Find Your Talent programmes has been widely lamented. The programme provided a very practical ways for people from disadvantaged backgrounds to access creative industries and thus establish routes to employment and personal fulfilment that more conventional forms of training failed to do. This programme should be brought back with special attention paid to those groups responsible for the worst of the rioting.
A sustainable source of funding for locally based cultural projects should be identified that will allow people to celebrate their communities and engage in urban mending. The Community Infrastructure Levy, included in the current Localism Bill, allows for a proportion to be spent locally. Some of this money should be opened up to ‘participatory budgeting.’Here, the community itself gets a direct say in how money should be spent. If young people were actively encouraged to get involved in this process, this would give them a stake in society and encourage them to recognise they have a means of making things happen for themselves. Connected with this, there is an opportunity for marginalised groups, for example some young ‘NEET’ people, to participate in Neighbourhood Planning activity as a form of civic apprenticeship to enable them to develop talents that may help them access employment and built their networking and basic skills. Neighbourhood plans offer a very real way for the more human aspects of community building to come to the fore. The more decisions are locally based, and closer to the people who will be affected by the changes, the more ‘cultural’ they will become.
The riots took place in Hackney, Tottenham and Salford; these are some of the most deprived parts of the UK. While the policy may seem worthwhile, it has been widely observed that many communities do not have the capacity to respond to the opportunities offered by localism. This lack of capacity stems in part from a dependency culture resulting from decades of ‘done to’ psychology, long term unemployment, and, the simple fact that, for those with get up and go, the struggle to get through the day absorbs all their energy. What these communities therefore need is extra support both from the public sector and property sector professionals.
The Notting Hill Riots have demonstrated the value of culture in restoring people’s faith in the city where they live. This is a moment to reflect on the value of those aspects of our lives that, while they are difficult to measure, are nevertheless of great value and, for some, the difference between a life of productive activity and a long prison sentence.
Over the last 12 months, London has seen record levels of demand from international retailers of which a significant amount has been from French brands, drawn to London by the attraction of expanding in a new market alongside their domestic expansion. The two main clusters are in South Molton Street and Westbourne Grove , the streetscape now has a strong Parisian feel similar to that of The Marais, one of the hippest and most desirable shopping districts in Paris.
While some French brands such as Comptoir des Cotonniers and Zadig & Voltaire have been present in London for some time, there has been a wave of French retailer openings including Les Petites, Sandro, Maje, Isabel Marant and Aubade the luxury French lingerie brand shortly to open their first store on South Molton Street . Arguably the most ambitious and acquisitive of these are The Kooples, who have opened eight stores in London in the last year
Geography has played a key part in this trend as the majority of retailers continue to run their operations from Paris, with accessibility via the Eurostar enabling finding and managing shops in London comparable to that of Nice and other cities in the south of France.
Typically these brands require between 1,000 – 1,500 sq ft in prime locations and in some instances are prepared to pay significant premiums to secure the best stores, as illustrated by Sandro’s rumoured £800,000 premium for 6 Marylebone High Street. Their commitment to the London retail market has also been cemented not only by their acquisition of stores but by their wide-ranging and prominent advertising campaigns, such as The Kooples iconic couples appearing on the side of numerous black taxis and Zadig & Volatire and Les Petites London bus adverts.
This trend looks set to continue over the next year and there are a number of new French brands seeking to enter the market, including Tara Jarmon .Lets hope the French follow the retail trend with some more of their fabulous restaurants!